WEi launched its first fund namely WE Balanced Fund (WEBF), a close-end fund, in November 2006, with a paid up capital of Rs. 200 million. The Fund had distributed a cash dividend of Rs. 1.05, which was a 90.52% payout against its net earnings in its first year since inception.
Foreseeing the economic direction in 1Q08, the Fund’s investment advisor decided to protect the certificate holders’ capital as opposed to exposing them to high risk.
The equity portfolio of WE Balanced Fund was thus off-loaded at premium levels compared to market rates prevalent at that time. The sole intention was to lock the Net Asset Value of the Fund above par value of Rs. 10 per certificate.
Hence, the liquidation proceeds of WE Balanced Fund were distributed to the Certificate Holders of the Fund on the basis of the NAV of Rs. 10.16 per Certificate during October, 2008.
In retrospect, the move protected a severe capital erosion of more than fifty percent.
WE have always focused on effective risk management as is evident from a zero percent default ratio before, during and after the recent crisis. This will ensure sustenance of our clients’ trust and continuity of our operations towards the achievement of our goals.
Risk management is an integral part of our trading platform, and our acumen has evolved over time with our rich experience. Our trading platform will undertake all the necessary steps that are required for efficient risk management of both our clients as well as for WE
"There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction."
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