Advertisement: Optimum Fund Enhanced Intelligence

A new era in investing

Advertisement: Optimum Fund Enhanced Intelligence

A new era in investing

Developed for Private Banking clients

Enhanced Intelligence is a sub-fund of Optimum Fund, an open-ended investment company under Belgian law (bevek), developed for Private Banking clients. The fund is managed by KBC Asset Management (KBC Asset Management NV). The minimum investment is 10,000 euros.

Dynamic fund

Optimum Fund Enhanced intelligence is a dynamic mixed fund that invests in various asset classes such as shares and bonds. There is no maturity date. Neither the capital nor the return is guaranteed or protected.

Co-managed with the support of artificial intelligence

Successful investing requires the ability to respond to financial markets quickly and efficiently. Artificial intelligence (AI) can prove useful here, as AI software makes it possible to analyse greater quantities of data more quickly and more thoroughly than ever before.

Investment policy

Optimum Fund Enhanced Intelligence invests directly or indirectly in various asset classes such as shares and/or share-related investments, bonds and/or bond-related investments, money market instruments, cash and/or alternative investments. The target allocation is 55% for the stock component and 45% for the bond component. The fund is actively managed with reference to the composite benchmark: 55% MSCI All Countries World Net Return Index, 22.5% JP Morgan EMU Government Bonds Investment Grade All Maturities Total Return Index and 22.5% iBoxx Euro Corporate bonds Total Return Index. It is not the aim of the fund to replicate this benchmark.

The fund may deviate from the target allocation based on mathematical models that use AI techniques such as machine learning. These models analyse market and economic data selected by KBC Asset Management on a daily basis in order to generate forecasts on the performance of financial markets and asset classes. KBC Asset Management determines which asset classes, regions, sectors and themes are eligible for the fund. The fund manager uses insights obtained from the mathematical models to determine the final asset allocation and the distribution within the various asset classes.

The fund manager can always decide to partly or entirely disregard these models, although human intervention is expected to be kept to a minimum.

The portfolio may be composed primarily of funds managed by a member of the KBC group.

There is no maturity date. Neither the capital nor the return is guaranteed or protected. The base currency is the euro.

Is Optimum Fund Enhanced Intelligence the right fund for you?

This fund is intended primarily for investors with a dynamic or highly dynamic risk preference. We recommend that you invest in this fund only if you understand the essential characteristics of the fund and, in particular, the risks associated with it.

Risks

The risk indicator is 3 on a scale of 1 (lower risk) to 7 (higher risk). The summary risk indicator is a guide to the level of risk of this product compared to other products. It shows how likely it is that the product will lose money because of movements in the markets or because we are not able to pay you.
3 reflects how sensitive the various assets in which the fund invests are to the markets. Consequently, the indicator lies between that of a typical bond fund (2) and a typical equity fund (4).
This product does not include any protection from future market performance so you could lose some or all of your investment.
The risk indicator assumes you keep the product for 5 years. The actual risk can vary significantly if you cash in at an early stage and you may get back less.

  • Average inflation risk
    The bond component does not provide any protection against an increase in the level of inflation.
  • Average exchange rate risk
    Since the fund also invests in securities denominated in currencies other than the euro there is a real chance that the value of an investment will be affected by movements in exchange rates.Average credit risk
  • The bond component of this fund invests primarily, but not exclusively, in bonds with an investment grade rating. A bond's rating indicates the probability of an investor actually receiving the proposed payments of interest and capital. Standard and Poor’s (S&P) and Fitch express their ratings in letters on a scale from AAA to D. Moody's expresses its ratings in letters on a scale from Aaa to Ca. Under this system, a bond rated AAA (S&P and Fitch) or Aaa (Moody’s) provides the highest probability that an investor will receive the proposed payments of interest and capital. Bonds with an investment grade rating have a long-term rating of BBB- (S&P and Fitch) or Baa3 (Moody’s) or higher. Consequently, the risk that an issuer can no longer meet its obligations is higher than when an investment is made only in bonds with an investment grade rating. If investors have any doubts regarding the creditworthiness of the bonds’ issuers, the value of those bonds can fall.

The AI software behind Optimum Fund Enhanced Intelligence makes it possible to analyse greater quantities of data more quickly and more thoroughly than ever before

  • Daily analysis of over 1,000 different economic data
  • Around 180 models search for patterns in these data
  • These models are fully adaptive and adjust themselves each time new data are added by the fund manager

Always abreast with an ever-changing world

Today’s cutting edge is soon yesterday’s news. This is why the fund manager continuously feeds new data to the AI software behind Optimum Fund Enhanced Intelligence. The fund manager also gives the AI software the opportunity to learn thanks to an annual retraining and remodelling process.​

You can compare retraining to an automatic update for your smartphone, whereas remodelling goes a step further. Think of it as the launch of a new smartphone model. Whenever possible or necessary, the models used to manage Optimum Fund Enhanced Intelligence are adjusted or updated.

Ruhi Ravichandran, Quant Expert, KBC Asset Management NV

A great way to diversify your portfolio

People often interpret new information in such a way that it fits their preconceptions, or they try to find a consensus. AI software does not do this. AI has no emotions or prejudices, rather it processes data objectively, and it sometimes goes against the grain.

It’s important to recognise the results delivered by the AI software behind Optimum Fund Enhanced Intelligence. I see this AI software as a new colleague with opinions of their own, which is precisely why Optimum Fund Enhanced Intelligence can help to spread investments within a widely diversified portfolio. It’s also interesting to note that this is the first, and currently only, Belgian fund to use AI in this way.

​Siegfried Top, Strategist, KBC Asset Management NV

Charges

Entry charge: 2.5%
Exit charge: none (except: 5% on exit within one month of entry)
Ongoing charges: 1.96% factored into the net asset value
Anti-dilution levy: in exceptional situations*

*If net entries and exits involve exceptionally large amounts, KBC Asset Management NV may decide to levy additional charges on the investors concerned (those entering or exiting the fund on that day) to mitigate the negative impact on the net asset value. The size of this levy is based on the transaction charges incurred by the fund manager. Applied in very exceptional situations, this levy is in the interests of those investors remaining in the fund.

Taxes

Stock market tax: 1.32% on exit (max. 4,000 euros) for capitalisation units.


WHT: 30% withholding tax on dividends for distribution units.
30% withholding tax on the gain.
See the ‘Asset test’ document at www.kbc.be/investment-legal-documents.

This tax treatment applies to individual investors subject to Belgian personal income tax and may change in the future.

More things you need to know

This information is governed by the laws of Belgium. Please read the Key Information Document, the fund fact sheet and the prospectus before subscribing. These documents can be obtained free of charge in Dutch and English from your KBC branch or at www.kbc.be/investment-legal-documents. You will also find a summary of your rights as an investor there in Dutch, English, French and German.

The net asset value can be found at www.beama.be and in KBC Mobile. You can address complaints to  complaints@kbc.be, tel. 016 43 25 94 or ombudsman@ombudsfin.be. For the complete overview of financial and economic terms, go to www.kbc.be/lexicon.
 

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