Competition among fund managers in Hong Kong to attract retail money into guaranteed mutual funds is forcing bigger guarantees over shorter amounts of time.
ABN AMRO Asset Management is now offering a fund that guarantees 108% of the principle, which is at the high end of the range, and only over a maturity of 2.5 years, which is at the short end. More money sooner, in other words.
It is a foreign exchange product based in Australian dollars, so the 108% guarantee just pips six-month bank deposit rates in Australia on a per annum basis, and outpaces six-month Hong Kong bank deposit rates by a mile.
Like with all guaranteed funds, however, a savvy investor...