The KTF Explainer

The Kudy Trust Fund (KTF) was created to meet the needs of Kudy investors who are interested in long-term investment opportunities. Launched in 2020, the KTF invests in a combination of assets with the capacity to generate higher risk-adjusted returns relative to instruments invested solely in traditional asset classes. The goal of the KTF is to protect investors from short term market fluctuations, locking the funds in over a period of five years.

The KTF is ideally suited for investors who are looking to:

• Achieve medium to long-term capital appreciation with moderate volatility
• Plan for long-dated expenses such as funding children’s education plans
• Create an alternative to regular pension contributions with a hedge against currency fluctuations

How the KTF Works

The KTF seeks to achieve its objectives by investing in a mix of assets across different asset classes, which include both traditional and alternative assets. These range from fixed-income instruments (Kudy Eurobond Fund, KEF); stocks, stock options and index options (Kudy Hedge Fund, KHF); and cryptocurrencies, which combine plain vanilla long positions with decentralized finance. The Fund uses these financial derivative instruments and alternative assets for hedging as well as efficient portfolio management. The alternative assets, particularly cryptocurrencies, which we hold. have enough liquidity across major exchanges to support seamless entry and exit.

The exposure to the assets that make up the KTF is tightly controlled because market movements are always cyclical with an upward trend. The KEF is relatively stable and so it has the most considerable exposure at 50–60%. This is followed by the KHF, which has a 25–35% exposure, and lastly, cryptocurrencies with only 10–15%. When stocks and cryptocurrencies rally, their exposure can rise beyond the upper limit. At this point, we take profits and transfer the excess into the KEF. If the reverse happens and their exposure falls below the lower limit, we sell out of the KEF to buy more. This way, the KEF acts as a buffer, as well as a form of savings account for the KTF.

Subscription

The minimum subscription for the KTF is 5,000 USD, and subsequently, existing subscribers can invest in multiples of 1,000 USD when the fund reopens for subscription. As earlier stated, this is a long term investment plan which has a lock-in period of five years. Afterwards, investors can choose to redeem their funds or roll them over for another five year period. It is important to note that investments in the KTF may suffer losses in the short term and so this fund may not be suitable for investors who are risk-averse.

Operational costs to clients are kept at a minimum because there are no periodic distributions. Additionally, there are no handling charges and no termination fees. However, clients are liable to a 1% management fee per annum, and those who wish to receive value for their redemption in an offshore account will bear the transfer charges.

We understand that you may have urgent liquidity needs, but there is a penalty of 5% of the amount to be liquidated in the first year (2021), 4% in the second year (2022), etc. This may look exorbitant, but remember that this fund has already paid for itself with over 25% returns in 6 months (please note that historical return is not a guarantee of future returns).

Risk Management Strategy

The risk management strategies employed in the KEF and KHF both feed into the KTF because it largely comprises of both asset classes. This Fund also comprises cryptocurrencies with an exposure level lower than that of the KEF and KHF. This is to ensure that market volatility in cryptocurrencies does not have a significant impact on the fund.

If the KTF appeals to you and you wish to learn more, please contact us through info@kudy.io. If you would like to start investing immediately, please go to www.kudy.io to open an account.