faqs

FAQs

WISE

It is an "Advisory" and "Portfolio Management" service for the affluent, High Net Worth and Ultra High Net worth Gulf Bank customers, helping them to diversify their investments and invest in international markets in an easy, transparent and cost efficient way.

WISE service is offered by Gulf Bank- regulated by the Central Bank of Kuwait and the Kuwait Capital Markets Authorities.

Each WISE Portfolio is designed to be consistent with client’s investment objective and risk tolerance.

WISE Portfolio

Any individual 18 years old or over, who is a legal Kuwaiti resident or a Kuwaiti citizen (with a permanent Kuwaiti address) and, an existing Gulf Bank account holder and passes the suitability questions.

Please get in touch with your Relationship Manager to complete the formalities.

A Kuwaiti citizen resident abroad who is an existing Gulf Bank account holder can open a WISE portfolio with Gulf Bank.

A US national who is an existing Gulf Bank account holder can open a WISE portfolio with Gulf Bank.

In order for us to manage your portfolio, you need to meet the minimum investment amount criteria along with completing our standard questionnaire to gauge your investment suitability.

We ask the minimum number of questions to accurately determine an individual's risk tolerance and investment goals over a set of time period in order to formulate the most suitable portfolio for you.

If we identify that the WISE service may not be suitable for you through questionnaire, we offer you other investment products such as funds, bonds or savings and deposits.

You are welcome to open as many portfolios as you would like as long as each portfolio comply with the required amount. You can create multiple portfolios by creating new goals.

Your portfolio consists of ETF securities and a small portion of cash balance.

The WISE Portfolio allocation depends on your risk tolerance score and your time horizon. This will be assessed following a structure questionnaire.

Our ETFs include:
US Equities: S&P 500 UCITS ETF (VUSD) from Vanguard.
All world Equities: FTSE All World UCITS ETF (VWRD) from Vanguard.
Emerging Market Equities: FTSE Emerging Markets UCITS (VDEM) from Vanguard.
US Bonds: iShares US Aggregate Bond UCITS (IUAG) from Ishares by BlackRock.

You may fund your portfolio by authorizing Gulf Bank to use your pre-selected linked Gulf Bank account.

US dollar. But you can fund your WISE portfolio through your KWD account.

You can expect your money to be invested within 5 working days after you have made the transfer. You will be notified about this via an SMS and through an email.

Usually, there will be a small amount of un-invested cash in your account for the following reasons:
a) We purchase only whole shares of ETFs for you. This leaves some cash un-invested until there is enough to buy more whole shares according to your plan.
b) Covering and settling our management fees.
c) You will receive some cash dividends which will be reinvested together with other transactions or send back to your linked account, depending on the option you select.

Your securities will be held in custody by Citibank, one of the largest US banks. The limited cash in your account will be held at our trading platform provider Saxo bank.

Yes, you can do this at the initial stage and subsequently by getting in touch with your Relationship Manager.

Please get in touch with your Relationship Manager.

Get in touch with your Relationship Manager and complete the full withdrawal form to close your WISE portfolio.

All funds in your WISE portfolio will be directed to your linked KWD account with Gulf Bank.

The amount held in cash is minimal and will not generate any interest income. Visit your Relationship Manager and provide him a completed signed copy of the full withdrawal form.

You can withdraw a minimum of [USD 1,000] as long as you maintain a minimum balance of [USD 10,000] in your account.

We execute your requests in coordination with our contracted service provider.

We execute your requests by the end of the following business day from receiving the request.

We provide you with a transaction confirmation report on the same day of execution.

We confirm execution of your requests via SMS to your registered phone number with us and send transaction confirmation receipts via your registered email with us.

Please get in touch with your Relationship Manager for any issue involving your WISE portfolio.

Customer Request

All requests (Invest More, Partial Sale or Total Sale) should be routed through your dedicated Relationship Manager.

Visit your Relationship Manager and provide him/her a completed signed copy of the Invest-More form.

Visit your Relationship Manager and provide him a completed signed copy of the partial withdrawal form.

Visit your Relationship Manager and provide him a completed signed copy of the full withdrawal form.

You can withdraw a minimum of [USD 1,000] as long as you maintain a minimum balance of [USD 10,000] in your account.

We execute your requests in coordination with our contracted service provider.

We execute your requests by the end of the following business day from receiving the request.

We provide you with a transaction confirmation report on the same day of execution.

We confirm execution of your requests via SMS to your registered phone number with us and send transaction confirmation receipts via your registered email with us.

Please get in touch with your Relationship Manager for any issue involving your WISE portfolio.

Fees

We charge a quarterly management fee based on an annual fee rate of 0.85% calculated on the daily values of your portfolio. The only other fee you incur is the very low ongoing charges embedded in the cost of the ETFs you will own that averages around 0.20%.

For this fee we determine your goals and risk profile, advice you to create the optimal portfolio compositions, create your portfolio, receive and reinvest dividends, protect, monitor and rebalance your portfolio.

Gulf Bank fee of 0.85% is very competitive and already well below the average fee charged by financial advisors.

You will pay no commissions on trades made on your behalf by Gulf Bank.

You will pay no custodial fees.

You will pay no entry or exit fees.

You will pay no withdrawal fees.

Management fees for a particular calendar quarter are charged on the first business day of the following quarter. Management fees will be reported clearly in your statements.

No. Should you wish to discontinue mid-way with us you will be charged on a pro-rata basis for the number of days you used our service in that particular quarter only.

Each quarter you are charged a management fee equal to 1/365 of the annual rate multiplied by the net market value of your invested assets as of the closing market day of each quarter, multiplied by the number of days in a quarter your money was managed. For example, Ali invests USD 10,000 in a diversified portfolio. Ali begins investing on April 5th. At the end of June, he has been investing for a total of 86 days. Gulf Bank's annual management fee rate is 0.85 percent. To simplify this example, we will assume that the net market value of Ali's assets remains USD 10,000 while invested. Therefore, Ali's management fee for the 2nd quarter equals: (annual management fee / 365) * (the net market value of managed assets) for every day on which the assets were managed = (0.85% / 365) * $10,000 * 86 = $20.03.

Returns

No, Gulf Bank cannot guarantee any level of performance and or that any Client will avoid a loss of portfolio assets. Any investment in securities involves the possibility of financial loss (including the loss of principal) that Clients should be prepared to bear.

Nobody can predict the future but we can learn from the past. The WISE investment tool gives you the distribution of results over the relevant time period if you would have invested according to this strategy. Future returns could turn out to be lower.

Next to the periodic performance, the WISE investment tool gives you the distribution of results over the relevant time period if you would have invested according to this strategy. The best way to see this is to take the questionnaire. It will show the historical performance of the different portfolios.

Like all market investments, the securities you own in your portfolio are subject to market risk. If the markets goes up, your balance will grow. When markets goes down, your portfolio can lose money. Fluctuations are especially hard to predict over the short term, but historical data shows that over the long-term your investment is likely to increase.

The ETFs selected pay dividends. However, you have the option to instruct us to either reinvest the dividends or route it to your linked account with Gulf Bank. In the absence of any such instructions from your end, we shall reinvest your dividend(s) automatically as per your portfolio composition mix.

Investments

We look for ETFs with high quality. They should track broad market weighted indices (providing diversification), from trustworthy providers, have low cost of ownership, USD denominated, distributes dividend, tax efficient, uses physical not synthetic replication, have limited securities lending, have sizable assets under management, have sufficient liquidity along with having a track record and have (proxy) benchmarks returns available for the last 25 years.

Those 4 carefully selected ETF's represent more than 6,000 underlying holdings and therefore provides high levels of diversification.

Our investment methodology is based on Modern Portfolio Theory. It states that returns are best maximized for any level of risk through the optimal mix of asset classes, not through security selection. Therefore the ETF that best represents an asset class is the best ETF for everyone.

Diversification is designed to increase a portfolio's risk-adjusted returns by reducing portfolio risk or volatility for every level of return or maximizing return for every level of risk. Proper diversification is implemented by investing in a sufficiently large number of securities that represent a set of relatively uncorrelated asset classes and geographies.

We may change the ETFs in the portfolio at any time without any prior written notice to you. We shall however, notify you of the changes in ETF offerings along with appropriate action (if any) to be undertaken.

No we don't allow customization beyond time horizon and risk tolerance at this time.

Our investment methodology is based on Modern Portfolio Theory. It states that returns are best maximized for any level of risk through the optimal mix of asset classes. Your allocations are a function of your risk tolerance, not the amount you invest.

We continuously monitor your portfolio and periodically rebalance it back to your target mix once a year. Your portfolio is rebalanced at a minimum on an annual basis. Any trades that take place will be followed by a rebalancing process.

Nothing. While you could buy the same ETFs from a traditional broker or fund company, you couldn't get them all from any one place without a fee, so you'd be paying to buy, sell, or trade the ETFs. Next to that you might pay account maintenance fees, custody fees etc. Even after you purchase the securities, you'd have to rebalance regularly — which few people do because of the work, scheduling, and transaction fees involved — to get the risk-reducing and returns-enhancing benefits of rebalancing (which Gulf Bank handles for you, automatically). Furthermore we ensure that you are constantly invested in the best available ETFs.

Foreign Exchange

Tax

No, we do not provide any advice involving tax. We only provide some information related to tax and we aim to invest in Tax efficient ETFs. We advise you to consult your own tax adviser to ascertain your individual tax situation.

Your investments are domiciled in Ireland and traded on the London Stock Exchange. A few key reasons for preferring Irish-domiciled ETFs for Kuwaiti residents and nationals:

  • Irish-domiciled ETFs benefit from its US holdings, and the US-Ireland tax treaty rate of 15% withholding on dividends and from numerous other tax treaties for non-US holdings. The alternative would be to invest in US domiciled ETFs, however this will result in 30% withholding tax and will even result in double tax withholding if the underlying holdings are outside the US (at the country and the US level).
  • Non-residents are not liable to Irish gift tax or inheritance tax, while owning US Domiciled ETF's could expose you to US estate taxes.

Your tax liability is based on your country of nationality / residency.
Irish domiciled ETFs are exempted from the Irish Taxes for non-nationals. This means that there is no Withholding tax, Inheritance tax, GIFT tax and Capital Gains tax for a non-national investor. However, a withholding depending upon the underlying investment takes places at the fund level (paid directly by the fund provider) and not on an individual investor level.