• All blog entries
    • Calculators
    • Case studies
    • Cost of living
    • CPF Are You Ready?
    • CPF Matters
    • Credit Management
    • e-Learning
    • Estate Planning
    • Events
    • Financial advisers
    • High Networth
    • Insurance
    • Investments
    • Letters to the Press
    • Magazines
    • Others
    • Retirement Planning
    • Scams
    • Surveys
    • Tragic Stories
    • Unethical sales process
    • Videos
  • Legal
  • Testimonies
    • Individual testimonies
    • Gallery
  • My Account
Hi, looking for a fee-based financial planner in Singapore? Read this article now!
  • Home
  • About
    • About Wilfred Ling
    • Wilfred Ling from Client to Adviser
    • Why do you run your own professional financial planning practice?
  • FAQs
    • FAQs on Wilfred Ling’s Financial Services
    • FAQs on Financial Planning
    • FAQs on Investments
    • FAQs on Insurance
    • FAQs on Estate Planning
  • Services
    • Overview
    • Retirement Planning
    • Investment Portfolio Management
    • Insurance Planning
  • Fees
  • Cool Tools
  • Contact
  • Subscribe
You are here: Home / Investments / The broken Umbrella: Platinum All Weather Fund

The broken Umbrella: Platinum All Weather Fund

29, August 2016 by Wilfred Ling 1 Comment

The Platinum All Weather Fund invested in complicated derivative transactions. The fund shorted out-of-the-money 'calls' on the S&P 100 index stocks and the long out-of-the-money 'puts' on the index.

The underlying fund manager was impressive. It was reported that since 1990, the fund manager delivered decent returns with low volatility. With such long track record, it must be a good investment.

I was approached to market this fund to my rich clients or known as “Accredited Investors”. The Business Development Director of Platinum Capital Management Ltd was an honest and hardworking man. He often come down to our office to explain to us how the fund works – which frankly speaking - I had no clue because it was too complicated for me to grasped.

On the 14th December 2008, the fund suddenly died and collapsed. I read it in the news. Although I had no clients’ monies invested in the fund, I was curious to know what happened. I emailed the Business Development Director and he called me back. On the phone was a broken and devastated man. He was devastated to learn that the Platinum All Weather fund invested its entire assets in the world’s largest and longest running Ponzi scheme operated by Bernard Madoff. It was subsequently found that Bernard Madoff had been running this Ponzi scheme since the early 1990s. Eventually Madoff was sentenced to 150 years in jail.

I wanted to show the performance of the Platinum All Weather Fund. However, I have already thrown away all marketing brochure.  Instead, I found the following performance of the Fairfield Sentry Fund which was the worst victim in terms of the largest exposure to the Madoff’s fraud:

Fairfield Sentry Fund

Source: http://bespokeinvest.typepad.com/bespoke/2008/12/if-you-ebroken umbrella - Platinum All Weather Fundver-see-a-chart-like-this-run-away-fast.html

You can see that in the above chart, there was almost no volatility. This is a bad sign as all investments have volatility. Even the risk free government bonds have volatility.

Conclusions

Accredited Investors must be careful as they could end up investing in a fraud. In this case, the Platinum All Weather Fund turns out to be a broken umbrella.

It is better to just invest in simple and ordinary retail investments.

Like this article? Subscribe to my newsletter below for more.

Get regular Tips on Financial Planning. Free subscription for 3 years. Covers all aspect of financial planning such as 'How much salary you should have?', 'How to avoid insurance that is not suitable?", 'What are the retirement planning methods?", etc

Share this:

  • Tweet
  • Print

Related

Filed Under: Investments Tagged With: hnw

Comments

  1. xyz says

    2, September 2016 at 5:20 pm

    MAS forced to speed up protection regulation for AI’s due to large losses in high-yield bonds marketed by banks here.

    http://www.bloomberg.com/news/articles/2016-09-02/singapore-investor-protection-amendments-headed-for-parliament

    Reply

What do you think? Leave a comment. Cancel reply


WILFRED LING, CFA

WANT TO GET REGULAR TIPS ON FINANCIAL PLANNING?

JOIN with thousands of other subscribers in getting tips on all aspect of financial planning such as "What is the minimum salary required?", "How avoid insurance that is not suitable", etc.


WILFRED LING IN THE NEWS

Click HERE to find out more.


THE KIND OF CLIENTS I AM LOOKING FOR

NEW TO US?

Learn how you can fully benefit from this massive website: HERE

For Registered Users Only (free)

  • iFAST Monthly Investment Update -July 2020 7/7/2020
  • Navigator Newsletter_June 2020 (36 pages) 19/6/2020
  • iFAST Monthly Investment Update -June 2020 (21 pages) 9/6/2020
  • Fortitude Budget – Save, create jobs and be post-pandemic ready 28/5/2020
  • Navigator Newsletter May 2020 (44 pages) 22/5/2020

View All

For Clients Only

  • JPMorgan Guide to Market Q2 2020 15/4/2020
  • JPMorgan Perspective Q2 2020 15/4/2020
  • JPMorgan Guide to Market Q1 2020 5/2/2020
  • JPMorgan Perspective Q1 2020 5/2/2020
  • PPAM Quarterly Market Outlook 1Q2020 (17 pages) 1/2/2020

View All

Top Posts

  • Vanguard funds in Singapore at just US$ 20,000! Vanguard is the world’s most famous index fund provider...
  • Strange way of how CPF Interest is calculated & retirement planning CPF has a rather strange way of calculating interest. I...
  • CPF: How to Accumulate $1m in your CPF by 57? I read from the CPF’s AREYOUREADY facebook about a man...
  • Access Information & Sign Up Page
  • How financial advisers are paid? This article is inspired by this article YOUR PRACTICE-...

Recent comments

  • LittleTiger on Nomination in insurance policies
  • Josephine Pek on Nomination in insurance policies
  • chonghoong lim on Strange way of how CPF Interest is calculated & retirement planning
  • Jeremy Tan on Strange way of how CPF Interest is calculated & retirement planning
  • Janice on CPF Retirement Sum Scheme
  • Duskerdawn on Strange way of how CPF Interest is calculated & retirement planning

To be notified of new blog post, like this facebook page

To be notified of new blog post, like this facebook page

Read articles based on different categories

Investment Login

iFAST Central: Login

iFAST Prestige: Login

Navigator: Login

Chartered Financial Analyst

CFA
5 years milestone in Continuing Education

Chartered Financial Consultant

ChFC

Featured Blogger

IM$avvy
© Copyright 2006-2021 Wilfred Ling. All Rights Reserved hollow-nasty
hollow-nasty
hollow-nasty
hollow-nasty