Pardus fixed income bond review – is it a good idea?

Pardus fixed income bond review – that will be the topic of this brief review.

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What is this investment in a nutshell?

Pardus is a fixed-return investment that is primarily sold to expats in the Middle East, Europe, South America and beyond, but can also be offered to locals. 

The key details are:

  • The investment duration is two years.
  • Between 1%-2% per month return, depending on which introducer is offering the bond.
  • The money is used for arbitrage trading. In other words, to exploit very small differences in price between the same assets in more than two markets.

What are the positives associated with this investment?

The main positives are:

  • It has performed well so far and importantly can give an investor a diversification tool within a wider portfolio. Holding Pardus as one small component of a wider portfolio, isn’t super risky, given the returns on offer.
  • The investment is listed on the Frankfurt Stock Exchange, but essentially this is something that can be paid for.
  • It is an uncorrelated asset, which means it can perform well if stock markets do badly during a period of time and produces income.
  • It isn’t a very long-term commitment. You aren’t locking your money in for say seven years like in many private equity deals.
  • If Pardus doesn’t find enough Arbitrage opportunities, the returns aren’t realistic.

What are the negatives associated with this investment?

  • There are, on balance, superior high-net-worth investments, which offer a similar return for a little less risk.
  • The previous point isn’t just applicable to high-net-worth assets. It is also relevant for stock markets. If you are prepared to deal with the volatility of investing in the S&P500 or Nasdaq, you will achieve double-digit returns if (and that is a big if) the markets produce what they have done historically, which is 10% per year for the S&P500 and 12% for the Nasdaq. You just need to deal with the volatility, which isn’t a good measure of risk.
  • The investment is locked in for a period of time. If you have an emergency, it is difficult to get out in time, even though it isn’t super long in terms of investment duration.
  • The potential to achieve a 100% loss if it goes wrong. Even with asset-backed investments, it is possible to lose it all. Again, this isn’t a big deal if you recognize this beforehand, and keep the risk at a manageable level.
  • There is a guarantee by GMRA Pardus Wealth to insure against any loss. However, a guarantee is only as good as the person, or institution, giving that guarantee, and it is unclear how strong this protection is.

Conclusion

Pardus isn’t a bad investment and has so far performed well. However, you should probably only consider it if you are high-net-worth and this investment is only a portion of a wider portfolio.

There are also better options available on a risk:reward basis. It is important that you either understand the risk properly yourself or have an advisor who does.

Pained by financial indecision? Want to invest with Adam?

Financial Planner - Adam Fayed

Adam is an internationally recognised author on financial matters, with over 285.2 million answers views on Quora.com and a widely sold book on Amazon

Further Reading

In the below article, taken directly from my online Quora answers, I spoke about two issues:

  • Why are millennials and Gen Z actively investing in the stock market through the web and app than the previous generation? Or is it a myth? 
  • What does nobody tell you about starting your own business?

To read more click on the link below

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