What is Portfolio Finance?
Portfolio Finance enables you to borrow at competitive rates against a broad range of financial assets as collaterals, including cash and equivalents, equities, bonds, mutual funds and structured notes, to meet liquidity needs and investment opportunities.
Discover Portfolio Finance for Investments
With the Portfolio Finance Simulator below, you can now simulate the illustrative effect of Portfolio Finance on your investment portfolios, as well as the Margin Call process employed by the Bank.
- Return Analysis
- Margin Call Analysis
Portfolio Finance
The risk of Margin Call and Force Sell could be reduced by lowering the level of Investment Leverage. This is illustrated in the table below.
Simulation based on Input | Simulation at various Investment Leverage (%) | ||||
Investment Leverage (%) | |||||
Buffer to Margin Call (MV %) | |||||
Buffer to Force Sell (MV %) |
MTM refers to the mark-to-market value of the Investments, based on a period of 12 months. In the above simulation, it is assumed that the loan currency and collateral currency are the same.
Disclaimer:
The information and figures provided above do not constitute an offer to sell nor is it a solicitation of an offer to enter into a Portfolio Finance transaction. The information set out above is intended for informational and illustrative purposes only and does not constitute actual, past or predicted performance or returns, but are calculated and derived based on the parameters provided by you. The maximum and minimum values of the input fields are solely for illustrative purposes, and do not represent the actual offering upon entering into a Portfolio Finance transaction.
Assumptions:
The scenarios depicted are neither exhaustive nor mutually exclusive. The scenarios and rates shown above are for a 1-year period return, and are not indicative of actual and/or future performance or returns. The above assumes the Loan Interest Rate and Coupon/Dividend Yield remain the same over the 1-year period, actual loan interest rates and coupon/dividend yield are subject to change. If the currency of the loan is different from the currency of the underlying investments, foreign exchange rate risk implications may affect the value of the loan and underlying investments. Prior to entering into a transaction, you should understand the product and its associated risks in order to determine whether the investment is suitable for you in light of your experience, objectives, financial position and other relevant circumstances.
Risk of Portfolio Finance
Key Risk Disclosures:
The following risk disclosures are not exhaustive description of all the risks involved, but a general statement of the risks commonly associated with Portfolio Finance.
Leverage Risk
Price Risk (Interest Rate Risk)
Liquidity Risk
Credit Risk
Marked-to-market Losses
Margin Call
Force Sell
Is Portfolio Finance Suitable for me?
![image](https://www.cdn.citibank.com/v1/sgipb/cbol/files/images/2023/suitable-potfolio-514x663.jpg)
Citibank Portfolio Finance is suitable for you if:
- You wish to enhance your potential investment returns and are willing to take on higher risks.
- You are investing in securities/Investment Products that could pay you regular coupons/dividends. If the coupon payments or dividends are higher than the interest charged on your facility, it can help to offset the cost of your borrowing.
- You have spare cash available. This is because in the event that your investments decline in market value below the stipulated margin call levels or when the loanable value of the collateral drops (as determined by the bank from time to time), you may be required to pay down a portion of the facility or place additional securities as collateral. Having spare cash available will also mean that you have the ability to pay down the facility should the cost of borrowing rise during the tenure of your investment.
You should obtain the advice of a licensed or an exempt financial advisor before making a commitment to enter into a Citibank Portfolio Finance transaction. In the event that you choose not to seek advice from a financial advisor, you should carefully consider whether a Citibank Portfolio Finance is suitable for you in light of your investment objectives, financial means and risk profile. When used wisely, Citibank Portfolio Finance could be an effective way to manage your total portfolio.
Disclaimer: