Twice the gain - Limit the pain
Liontamer's GLOBAL Series 3
Wednesday, June 20th 2007, 3:27PM
Liontamer's latest capital protected product, GLOBAL series 3, is a fund with a compelling difference. First of all, GLOBAL Series 3 provides a choice of two different unit types; both have an exposure to international sharemarkets, plus either full or partial capital protection at maturity*. Nothing that unusual there you might say, however, the key distinction is that both unit types are 'booster units' which give investors the opportunity to really accelerate their potential returns – by 150% using standard booster units and by an impressive 200% using super-booster units.Like each of Liontamer's previous funds, GLOBAL Series 3 shields investor's capital from falls in the market, in this case by offering two different levels of protection; booster units provide full (100%) capital protection, while super-booster units provide partial (90%) protection. The capital protection is a key feature that offers investors a good degree of comfort; however, the really exciting thing (as you can see in the chart below) is the added boost these units can give to returns.
With the rest of the world now less reliant than ever on the US to consume their exports and provide a head of steam to roll the global economy along, and with the emergence of influential new markets like China, there remain some good reasons to keep some exposure to international equities.
However, there are some glimmers of volatility in certain key markets, namely the US, which have the potential to impact on returns from global markets in the medium-term. Advisers can take steps to ensure their clients' portfolios are positioned to weather any possible future volatility. We believe that capital protection combined with accelerated market returns is an ideal combination for many portfolios.
Five ways to benefit from GLOBAL Series 3
1. Lock-in previous gains
Most well-diversified portfolios will have benefited from rising
global (as well as local) equity markets. Given the generally
positive outlook for global equities, the consensus seems to
be that now is not the time to sell up. However, for advisers
who are cautious about the medium-term outlook for global
sharemarkets this may be an ideal opportunity to lock-in those
past gains. Switches into capital protected products allow you
to ensure the amount of a client's current investment is not
diminished, while still maintaining an exposure to international
equities.
2. Dial down the risk profile
Using a product like GLOBAL Series 3 can provide a strategy to
change the risk/return profile of the international equities sector
of your clients' portfolios. Lowering risk, accelerating returns
and hedging currency dramatically changes risk profiles. This
leaves more flexibility to use more aggressive funds or niches
providers to greater advantage.
3. Achieve a lower weighting to the US
While the prospects are still looking good for many markets,
the possible exception is the United States, where a few storm
clouds have been building in the credit markets and growth
has slowed to an ambling 2-2.5% p.a. The Liontamer Global
Index has an underweight exposure to the US for these very
reasons. The Global Index allocates quite differently to major
benchmarks. For example, some will be as much as 50%
weighted to the US – we've cut that to 25% for this fund based
on our research view.
4. When good markets go bad – boost your returns
And if you are at all concerned that there is a risk that returns
from global markets will ease off and even be mediocre over the
medium-term then our booster units provide a possible solution.
By using a growth multiplier such as our super-booster units you
can double the Index return, making even ordinary performance
look good – while minimising the downside risk.
5. Get in while the going is good
Now is a great opportunity to take advantage of one of the
best pricing environments that we have seen for capital
protected products. Our high interest rate means we can build
products that have participation rates which are the envy of our
international peers.
Full details are contained in the Investment Statement and registered Prospectus, provided by Liontamer Investment Management Pty Ltd (ABN 23 104 174 325). # Liontamer has the discretion to reduce or increase the maturity date by six months, depending on market movements during the offer period. *Capital protection at maturity, means you will receive back 100% for booster units, or 90% for super-booster units, of the combined amount invested and early bird interest (earned during the offer period) less any entry fee charged (up to 3%). There is a more detailed description of capital protection in the Investment Statement and the limited circumstances when capital protection may not be available.
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