Savings & Investments Kauri Notes and Kauri Units continue to perform in current volatile markets
Kauri Income Notes and Units
The performance of both Kauri Notes and Kauri Income Units continues to show satisfactory results since their respective inceptions. Click on the above links for more information.
In May a number of international financial asset classes experienced further declines in price. The "absolute return" investment strategies of the Kauri Income fund managers means they have the ability to hedge their investments and generate positive returns in falling markets.
The importance of this hedging ability in the mandates of the over 50 managers in the Kauri Units Permal fund exercised in a skilled manner together with the nature of the instruments into which they invest is the foundation of the benefits to investors from diversification of their portfolios away from just debt and equities benefits able to be delivered to clients.
Kauri Notes has now paid its third scheduled quarterly interest coupon. The benefits of systematic diversification always underpin this performance. The objective is to reduce the risks associated with achieving the targeted returns.
Kauri Growth Units
Kauri Growth Units also achieved a satisfactory performance over the month. Click here to view the latest result. The increase in value was 2.8%. The equivalent annualised return over the 3 months since issuance is 11.1%.
The Growth Units performance reflects the investment outcomes of over 150 fund managers within 6 diversified Permal portfolios. This USD return is converted into a NZD return through a rolling monthly currency hedging.
This performance included contributions from "absolute return" and "directional" fund manager performance. Conditions in financial markets continued to be volatile during the period as the sceptre of high inflation and looming recession begins to make itself felt in major markets.
Growth Units represent an effective security for those investors seeking longer term growth in value on a tax efficient basis.
The risk diversification is provided by a leveraged investment into a majority weighting of "directional" and a minority weighting of "absolute return" hedge funds whose objective is to protect investors against two thirds of market downside balanced by the dynamic leverage to increase upside returns. Growth Units may experience future volatility from month to month in the short term. In the longer term the achievement of satisfactory growth in value is the investment objective for Kauri Growth Units.
Kauri Growth Units Monthly Subscriptions
In response to advisors requests for more regular client investment opportunities into the Kauri Growth Units, subscriptions for these are now able to be accepted by Savings & Investments on a monthly basis up until 22 October 2008. The investor will be issued with Growth Units of the class designated in the immediately succeeding allotment date outlined in the Investment Statement.
Summary of the Kauri Growth Units Offer
Kauri Growth Units |
Kauri Growth Units are designed to provide investors with capital appreciation (aim to achieve higher return than 90 Day Bank Bill Yield published by the Reserve Bank of New Zealand plus 5% p.a.) derived from investment in shares which hold leveraged investments in 6 Permal multi-manager funds. |
Kauri Principal Protection |
Investors have capital protection. This is provided by Merrill Lynch & Co., Inc. rated A by Standard and Poor’s |
Historical Performance |
Back testing indicates Kauri Growth Units would have achieved an 18.21% annualised return over the first 2 years and 7 months period since inception. |
Benchmark |
90 day Bank Bill Yield Published by the Reserve Bank of New Zealand during the calculation period plus 5% p.a. |
Permal Group and Permal funds Investment Track Record |
Permal Group is one of the worlds leading multi-manager funds with a 30 year investment history of optimising investor returns |
Permal Funds Percentage Participations and Standard & Poor’s Ratings |
39% Permal Investment Holdings N.V. : AAA |
Liquidity of Kauri Growth Units |
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Application Date and Maturity Date |
Applications for class D Units must be received by 22 July 2008 |
Fees and Brokerage |
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Summary of the Kauri Income Units Offer
Kauri Income |
Kauri Income Units are debt securities paying a 9.50% p.a. interest on a quarterly basis. The Units are a leveraged investment in the Permal Group FX multi-manger portfolio fund. |
Kauri Principal and Fixed Interest Guarantee |
The principal amount of Kauri Income Units and the first 8 interest payments commencing from 20th April 2008, are guaranteed by Merrill Lynch & Co., Inc rated A by Standard and Poors |
Historical Returns and Gain on Principal |
Back tests indicate a range of annualised returns from 11.6% up to 18.2 % p.a. If the Units earn a return of more than 9.50% annually, 100% of this premium will be paid to investors at maturity. |
Liquidity of Kauri Income Units |
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Permal Group and Permal FX fund Investment Track Record |
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Permal FX Fund Standard & Poor’s Rating |
The Permal Fund has a AA Standard & Poor’s rating for its management and historic performance |
Application Date and Maturity Date |
Applications for class D Units must be received by 22 July 2008 |
Fees and Brokerage |
A management fee of 0.042% per month is paid. There are fees charged to recover expenses for early withdrawals over the first 3 years. Brokerage of 1.5% is paid with a 0.2% p.a. trailer fee* paid quarterly. (*Conditions apply) |
To obtain a copy of the Investment Statement:
Phone: |
0800 668 889 |
Web: |
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Email: |
DISCLAIMER: Kauri Units are offered by Savings & Investments Ltd pursuant to an Investment Statement and Prospectus.
Any decision to invest should be based upon the information contained within the Investment Statement and Prospectus, copies of which can be obtained from Savings & Investments Ltd.
In providing this material, Savings & Investments Ltd has not taken into account your individual investment objectives, financial situation or particular needs.
Before you make an investment decision you should, with or without Savings & Investment’s assistance, consider whether any advice contained in this material is appropriate in light of your particular investment needs, objectives and financial circumstances.
The information provided in the material is a guide only; you should not rely on any of the material without first having spoken to your adviser.