KEY POINTS:
What is it called and what sort of savings product is it?
Liontamer has a new capital protected fund, which invests in water assets.
Who is the company behind it?
Liontamer is the leading provider of capital protected funds in NZ. Recently, Belgium-headquartered bank KBC Asset Management took a 51 per cent stake in the business. KBC is the 11th largest bank in Europe and is a major player in the capital protected product market.
Who is the target market?
People who want international share exposure, are a little risk adverse and are happy to take a fund that invests in just one sector. Also, investors who like the idea of investing in the international water industry but who also want to limit any potential losses.
What return does it offer?
Investors have two choices. The first is to have 100 per cent capital protection - meaning they will get their initial investment back even if the fund tanks. If it performs well they will get 130 per cent of the performance of the underlying index. For less risk- adverse investors there is the option of protection of 90 per cent of your principal but getting 165 per cent of the growth in the underlying index.
When was it launched?
The offer opened on August 3 and closes on November 2.
What other products is it like or is it competing with?
It is up against other international share funds, and to some extent the recent Thames Water offer. The difference between the two though is stark. Liontamer's offer is more like an equity investment in a wide basket of water stocks, while Thames was packaged as a fixed-interest option in a single water utility.
Long, short or medium term?
Four or five years, depending on the level of capital protection.
What's the unique selling point?
Water is the essence of life, so to have an investment solely focussed on it makes logical sense.
How strong a stomach do you need for it?
On paper, it looks low risk. There is capital protection and the asset class - water - looks safe.
What's the hitch?
Your capital is tied up for four or five years. You can get out early but there is no capital protection if the fund is not held to maturity.
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