WISE is an “Advisory” and “Portfolio Management” service that provides all Gulf Bank customers an investment advisory service to diversify their investments in international markets in an easy, transparent, and cost-efficient way.
Each WISE Portfolio is designed to be consistent with client’s investment objective, risk tolerance, and time horizon.
The Bank has developed its own WISE application to allow the Relationship Managers to:
1- Explain the WISE service.
2- Take a questionnaire to assess the customer’s suitability, goals, time horizon, and risk tolerance.
3- Simulate different investment scenarios with the client to decide the optimal risk return composition that matches their goals, time horizon, and risk tolerance using insights from 25 years of historical returns.
4- Sign the customers up for WISE.
Any Kuwaiti citizen or resident of legal age (21 years old). A WISE portfolio for minors may be opened by their legal guardian. It is required to have a Gulf Bank account and pass the suitability questions asked.
An expat who is an existing Gulf Bank account holder can open a WISE portfolio with Gulf Bank.
Please get in touch with your Relationship Manager to complete the requirements.
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.
USD 10,000 per account.
By asking a minimum amount of questions, we are able 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.
If we identify that the WISE service may not be suitable for you through the questionnaire, we will offer you other investment products such as funds, bonds, savings, or deposits.
No, you can’t open a joint portfolio.
You are welcome to open as many portfolios as you would like, as long as each portfolio complies with the required amount. You can create multiple portfolios by creating new goals.
Your portfolio will consist of ETF securities and a small portion of cash. The ETF securities include equities, bonds, and/ or gold, which will be determined according to your investment objective, risk tolerance, and time horizon.
The WISE portfolio allocation will depend on your investment objective, time horizon, and risk tolerance. A structured questionnaire will help you determine these criteria, and the allocation will be recommended accordingly.
WISE ETFs include:
General WISE Portfolios:
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.
US Preferred Shares: Invesco Preferred Shares UCITS ETF Dist (PRFD) from Invesco
Emerging Market Income: iShares EM Dividend UCITS ETF (SEDY) from iShares
US Income: Invesco S&P 500 High Dividend Low Volatility UCITS ETF Dist (HDLV) from Invesco
World Islamic: iShares MSCI World Islamic UCITS ETF (ISDW) from iShares
US Islamic: iShares MSCI USA Islamic UCITS ETF (ISDU) from iShares
Physicla Gold: iShares Physical Gold ETC (IGLN) from iShares
You may fund your portfolio by authorizing Gulf Bank to use your pre-selected linked Gulf Bank account.
The currency is US dollars; however you can fund your WISE portfolio through your KWD account.
No, it is not possible to have WISE portfolio in other currencies.
You can expect your money to be invested within 5 working days after you receive your verification call. You will be notified via an SMS and by email.
There will usually 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 cash dividends which will be periodically reinvested or sent back to your linked account, depending on the option you select.
Your securities will be held in custody by Citibank in London, 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 so at the initial stage and subsequently by getting in touch with your Relationship Manager.
Please get in touch with your Relationship Manager.
No, at this moment transferring securities is not possible.
Get in touch with your Relationship Manager and complete the Full Withdrawal Form to close your WISE portfolio.
All the funds in your WISE portfolio will be directed to your linked account with Gulf Bank.
The amount held in cash is minimal and will not generate any interest income.
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 with a completed and signed copy of the Invest-More Form.
Visit your Relationship Manager and provide him/ her with a completed and signed copy of the Partial Withdrawal Form.
Visit your Relationship Manager and provide him/ her with a completed and 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 within 5 business day from receiving the signed request and after conducting the verification call with you.
We provide you with a transaction confirmation report within 3 working days after the execution.
We confirm execution of your requests via SMS to your registered phone number and send your transaction confirmation reports via.
Please get in touch with your Relationship Manager for any issue involving your WISE portfolio.
Yes, we have Investment advisors who are certified by the Capital Markets Authority in Kuwait and ready to assist you during working hours.
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 low ongoing charges embedded in the cost of the ETFs.
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, secure your transactions, as well as 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 working week 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 of each day of the 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. Therefore, Ali’s management fee for the 2nd quarter equals: (annual management fee / 365) * (the net market value of managed assets * number of days on which the assets were managed = (0.85% / 365) * $10,000 * 86 = $20.03.)
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 Application gives you the distribution of results over the relevant time period if you would have invested according to the recommended strategy. Future returns could turn out to be lower.
WISE Application gives you the distribution of results over the relevant time period if you would have invested according to the recommended strategy. The best way to see this is to take the questionnaire as it will show the historical performance of the different portfolios.
Like all market investments, the securities you own in your WISE portfolio are subject to market risk. If the markets goes up, your balance will grow and if the markets goes down, your portfolio can lose money. Fluctuations are 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. You have the option to instruct us to either reinvest the dividend(s) 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.
An Exchange Traded Fund is an investment instrument which is traded on the stock exchange and tracks the performance of a specific index or sector.
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, and have a track record and have (proxy) benchmarks returns available for the last 25 years.
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. However, we shall 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 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 wouldn’t get them all from any one place without a fee, so you’d be paying to buy, sell, or trade the ETFs. You also 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.
A Gulf Bank staff will conduct a verification call to confirm the portfolio opening and he can provide you with the amount to be deducted from your linked account before executing such a transfer.
Yes, as this is a USD service you may be exposed to exchange rate fluctuations. Also, the ETF's have non-USD holdings creating an FX-exposure.
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 are:
- 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.