The achievement of the "Orient Trust" goals in view of investment policy.

The main goal of the "Orient Trust" is to increase total value of the assets in the interest of the beneficiaries (investors), i.e. getting profit by investors.

The fulfillment of the task which is connected with getting profit is described and regulated by the "Orient Trust" Settlement, given in the part of Investment policy. If to compare the investment policy of the "Orient Trust" and the policy of many other investment trusts and funds, if can be said in an unbiased way that the policy of the "Orient Trust" is conservative, widely diversified and is more a kind of a saving club or pension fund.

Despite quite conservative policy of the "Orient Trust", which regulates and limits to a considerable extend the activity of an investment manager in making investment decisions, the "Orient Trust" has all the possibilities for the successful fulfillment of its goals.

Effective realization of the "Orient Trust" goals in many aspects depends on the professionalism of a team working for it i.e. an investment manager, administrator, directors carrying out the control of the activity of an investment manager and of course on a trustee of the holding company 'Hi Fi Group', which organizes the functioning of all parts of the "Orient Trust".

The factors given in table I should be examined and analyzed. They follow two main tasks:

• to understand which level of income for the sum invested lets the fund function with regard to the safety of investor's funds.
• to understand which factual income is possible to guarantee with regard to twofold credit leverage and minimal income rate, comparable with % of the investment 'depo' of an average European bank.

Table 1.

Table I gives a variant of investment based on the program of a 10 year investment period in ten equal parts in "Orient Trust" with a minimal income shown in lines 4 and 9, which is equal to 3,9% per year.

Maximum expenditures of the "Orient Trust" service is equal to 14,2% from the total sum of investments for the period of 10 years. With this attitude the financial results corresponds to the task given, i.e. the investor's funds are saved and 4,71% of additional income is received, which is shown in lines 6 and 7 of the table.

The second part of a table shows a model of investment, described in the previous part of the text, but it takes into consideration the employment of credit resources which are two times more that the investor's own funds.

The planned credit rate is 3,5%, and income is 3,9%, with the difference of 0,4%, This allows to increase investor's factual income to 6,65%, which follows from the lines 15 and 16 of the table. The variant, shown in table I, is a pessimistic model of an investment process of "Orient Trust" and by its nature is a type of saving. However, it allows to be sure in one's investments, taking into account the fact that investment is carried out together with the rating not less than AA, which is required by an investment policy of the "Orient Trust".

Date and the analysis of the factors given in table 2 are of a greater interest for an investor. Table 2

Table 2.

Table 2 is different from the previous one only by a level of a planned income equal to 9,97% per year, which is shown in a linear form. However, it does not actually correspond to the market practice, but on the other hand allows to carry out the analysis on the basis of a 150 year old statistics of the company PRUDENTIAL INTERNATION AL, the biggest insurance and fund company of Great Britain, with the rating AA++, given by S & R, according to the results of work of the 2004 financial year.

The product PRUDENTIAL, which is called international bonds 'prudence' (INTER NATIONAL PRUDENCE BOND) with the period of an investment more that 5 year, provides a guaranteed total, which consists of several parts as well a the income more than 7%, and with investments more than for 8 years 10% of annual income.

Taking into account the average (for middle term trusts) annual income of 9,97%, it is clearly seen from lines 6 and 7 that with the employment of leverage, the income will be 43,49%, and considering credit lever (x2), shown in lines, the income will be 80,92% for 10 years.