KEY POINTS:
What is it called and what sort of savings product is this fund?
The Absolute Capital Yield Strategies Fund is a New Zealand denominated Australian unit trust.
What is the company that's behind it?
Sydney-based Absolute Capital is a specialist fund manager, which is partly owned by ABN Amro. Its best-known products in New Zealand are the two NZDX listed "PINS" funds.
Who has been identified as the target market?
Absolute Capital says it suits investors looking to boost the income from their investments, and it suits people who want returns higher than what cash will give and who are prepared to venture into some of the more sophisticated assets, such as structured credit.
What levels of return is it offering?
The technical answer is that it aims to deliver returns above the New Zealand dollar equivalent of both the UBS Australia Bank Bill Index and the UBS Australia Composite Bond Index over rolling 12-month periods, while preserving capital. This is a new fund without a track record, but the underlying Australian dollar fund has achieved this goal returning 8.02 per cent annually since inception.
When was this new product launched?
The New Zealand dollar version of this fund opened on May 7.
What other products on the market is it like or is it competing with?
This fund, with its investment focus, is a relatively unique offering, although there are some local managed funds with sophisticated income portfolios.
Is it long term, short term or medium term?
It's a medium-term investment.
What is the unique selling point?
Absolute Capital is a specialist in this area with a sound track record. The investment universe can give some welcome diversification to investors' income assets.
How strong a stomach do you need for it?
Being an income investment it is towards the lower end of the risk spectrum, however within the income options it is towards the high-risk end. Let's say medium overall.
What's the hitch?
To invest in this fund you will probably need to go through a financial adviser because it is only available through their platform services and there is a $10,000 minimum.
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