In an effort to create a structure with a diverse underlying option, Lyxor Asset Management is offering a new product, its Four Treasures Guaranteed Fund series, until Sept 21. The underlying option is structured as Chinese equities (20%), commodities (20%), gold (30%) and European real estate (30%).
"The Four Treasures Guaranteed Funds constitute an excellent opportunity to investors not only to make a profit with the multi-asset class strategy but also to diversify their investment to low or negative correlation with equity and fixed income that help increase overall returns of the portfolio." says Andrew Au, senior vice president at SG Structured Products Asia ex-Japan.
The funds offer two currency choices to suit investors' investment objectives: The Four Treasures US dollar guaranteed fund, which is four years and denominated in US dollars or the Four Treasures Australian dollar fund, which is two-and-a-half years and based in Australian dollars. The minimum investment for the US dollar fund is $3,000. The minimum investment for the Australian dollar fund is A$5,000.
There is no initial sales charge or realisation fee. However there is a management fee of an up-front 3.6% for the US dollar fund and 2.5% for the Australian dollar fund with an annual 0.10% fee on both funds.
Regardless of the performance of the underlying assets, investors will receive a guaranteed coupon of 8% for the US dollar fund and 7.5% for the Australian dollar fund at the end of the first year. In the worst case scenario, at maturity, investors will receive the guaranteed coupon, (i.e. 8% for the US dollar fund and 7.5% for Australian dollar fund) and 100% capital guarantee, although the capital guarantee does not apply to redemption before maturity.
Investors could also receive a potential return, equal to the participating rate times the average basket minus 8% for the US dollar fund or minus 7.5% for the Australian dollar fund.
The funds are distributed by Bank of America (Asia), Belgian Bank, Citibank(Hong Kong), CITIC Ka Wah Bank, Dah Sing Bank, DBS Bank, Hang Seng Bank, HSBC and Mevas Bank.
