MONEYfund 2 going off with a bang
Liontamer's latest income fund, MONEYfund 2, is going off with "a bang" because of its new units.
Saturday, October 9th 2004, 10:03AM
Following the success of its first capital protected income-based fund, Liontamer has launched its second series complete with refinements.
The MONEYfund is designed to compete with more traditional forms of fixed interest such as secured debentures.
It is a closed end vehicle with a five-year term and it has two forms of units.
The first type of units are called “income units”. The objective of these units is to deliver a full return of capital, together with a yearly income of up to 7%.
At maturity, any amount remaining in the fund, including additional gains above the 7% income, is paid as a further return.
The new feature of this fund is the “Accumulation units” which are forecast to give investors a 119% target return over 5 years – which equates to 17% pa.
Liontamer head of investment solutions Janine Starks says “the new accumulation units going off with a bang. We’re getting two-thirds of our volume into these units.” The fund is quite different to other income offerings in the market.
Liontamer is buying a structured note issued by Deusche Bank which invests in the bank’s Dynamic Carry Index which makes gains from movements in currencies and interest rates around the world.
With this structure the fund chases yields around the world by investing in countries which have high interest rates and then borrows from other countries that have low rates.
Stark says Liontamer is discovering the accumulation units appeal to people want income funds and want international money market exposure, but they don’t necessarily want to take the income regularly.
She says the fund is establishing itself as the ‘alpha’ in the income portfolio, that is it is adding value in an asset class where this is difficult to do.
“More and more financial advisers are embracing the fund. Our first series was well supported, but everyday we’re getting phone calls from people who have never used Liontamer products.
“An innovative capital protected income fund has raised their interest and they’re keen to learn about the strategy of ‘money chasing yields’.”
Research report CLICK HERE
Fund fact sheet CLICK HERE
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