Asia Kabushiki Shinbun – February 24, 1997

Kabushiki
Shinbun

February 24, 1997

“Princeton Fund” is Inwardly Popular—The Average Performance Rate is 30%

Funds Raised Reached Yen 150 Billion

Princeton Economic Institute Inc. (Whose Chairman is Mr. Martin Armstrong) Manages the Funds

“Princeton Fund” (P Fund hereafter) which is managed by Princeton Economic Institute Inc., whose chairman is Mr. Martin Armstrong, is now inwardly popular. With the minimum lot for investment being Yen 500 million in principle, the P Fund targets mostly institutions but has already achieved to raise Yen 150 billion (on a face value basis) in Japan. The performance of the fund since its start in 1991 is extremely high to be up 30% on the average (based on Yen), supporting the popularity. The fund attracts investor’s attention as a forerunner in Japan, where there are a few funds which makes a feature of fund manager’s own.

P Fund takes a form of a US Dollar denominated bond to be subscribed in a private placement. There are two types of the bond. One is the Regular type which is not guaranteed for the principal and the other is the Guaranteed type which guarantees for redemption at par and coupon payment which is much higher than the market rates. The amount issued as of February us Yen 120 billion for the Regular type and Yen 30 billion for the Guaranteed type (both on a face value basis).

To explain the contents of the product, the Yen funds raised being converted into the US Dollar are invested in the Fannie Mae bonds (Mortgaged bonds guaranteed by Federal National Mortgage Association). The Fannie Mae bonds are treated as same as the US government bonds which have the rating of AAA. Holding the bonds yields 5.2 – 2.5% p.a. and P Fund, when they judge a good investment opportunity has come, takes a position in Futures/Options targeting main markets of the world by using 20% of Fannie Mae bonds as collateral.

Princeton who acts as an advisor to European global companies handles all the management of the fund. The management of the Regular type depends on the Princeton’s “Reversal System” for its judgement. The Reversal System is Princeton’s proprietary system which searches trends in main markets of the world and famous for the right forecast for the reversal of the trend in the Dollar against the Yen to Yen’s depreciation in April, 1995.

By the way, the investment targets for the Regular type include almost all investment vehicles like stocks, commodities and so on. The Guaranteed type invests in bonds and, depending on a case, takes on a currency hedge.

As to commissions, the Guaranteed type requires nothing and the Regular type does the up-front annual management commission of 5% of a net asset value and a performance related commission. The performance related commission is to be charged, only when the first peak since the start in a net asset value will be exceeded by 20% of the excess. The assets are kept in a Segregated Account with Republic New York Securities Corporation in the USA and, therefore, the asset preservation is designed even if Cresvale International Ltd., which keeps the P fund, and/or Princeton went bankrupt.

The investment period, to be set initially, is generally 3 – 5 years for the Regular type and 6 months – 2 years for the Guaranteed type. Only the regular type allows a cancellation before maturity.

Any inquiries about P fund are accepted by Mr. Nakamura, business planning office, Cresvale International Ltd., Tokyo Branch. Phone number is 03-3664-6905.

P Fund Performance Records

 

Net after the Annual Management Commission and Brokerage Commissions 

Based on Yen Based on US$
1991 26.86% 36.71%
1992 51.81% 51.37%
1993 26.01% 30.06%
1994 14.03% 22.17%
1995 35.78% 18.21%
1996 23.52% 17.94%
Average 29.67% 29.41%

Note: This calculation targets all the funds of both the Regular type and the Guaranteed type. As far as 1991 and 1992 are concerned, just US Dollar based investors were available and, therefore, the performance in terms of Yen is just on a calculation tingeing the annual fluctuation of the Dollar against the Yen with the Dollar based performance. The new funds having more than 6 month history in the years concerned are in the calculation. No audit has been taken.