ED&F Man Investment Products is launching a new guaranteed investment fund aimed at the retail market...
The Man-AP Stratum fund is based on an existing product called AHL Institutional Portfolio that employs a variety of programmes trading in stock indices, bonds currencies, short-term interest rates and a
selection of actively traded
commodities such as energies and metals.
The aim is to identify and exploit market inefficiencies as well as use trend-following techniques. The investment managers will focus on highly liquid markets where trades can be executed quickly and efficiently.
The Man-AP Stratum fund is a closed end fund that is
offered as a redeemable structured guaranteed bond of $1 each. It has a target return, net of fees, of approximately 16%-18% per annum with a guarantee from Bank of America - which has a credit rating of AA - that the principal face value
of the bond will be repaid at
the maturity date of 30 September 2009.
The fund can gear up to 125% and will invest at least 75% of its assets in the programmes in the AHL Institutional Portfolio.
The balance, a maximum of 50% of the fund, can be invested in other programmes not yet identified.
Commenting on the launch of the new fund, John Kelly, marketing director of ED&F Man Investment Products, said: "Man-AP Stratum makes available to a much wider range of investors an investment programme that has achieved
outstanding returns for the professional investor, and has
done so with a low correlation with international capital
The company quotes a total return for the AHL Institutional Portfolio in the 45 months since its inception in October 1995 of 116.9% and a correlation to world stock markets of world bond markets of only 0.02 and 0.27 respectively.
The management fees are 3% per annum with an additional performance incentive fee of 20%. Other costs include a 0.375% yearly fee to Bank of America for the guarantee facility.
The bonds will be listed on the Luxembourg stock exchange and registered in Bermuda. The offer period is from 23 August to 1 October 1999, with a minimum investment of $50,000. In the first year, there will be a redemption penalty of 4%, which gets reduced progressively to 0% after six years.
Meanwhile, Man-IP Prisma (Series 2) Limited, the second
in a series of guaranteed
funds, closed for subscriptions on 22 June having raised
more than $92m.
Its predecessor, which closed in early April, had $145m of subscriptions.
E D & F Man has a range of over 100 alternative investment vehicles and over $4bn under management.
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