The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
In this fund, which is not fully guaranteed, investors gain exposure to AsiaÆs three key markets û Japan, Korea, and Hong Kong - and can achieve a progressive 10% return each year should any of the markets reach a 5% return or more since the launch.
ôThe Asian growth story is sure to happen, but knowing where and when to invest is key," says Andrew Au, senior VP at SG Structured Products. "This fund is unique in the market as it helps investors achieve a target return based on the Asian growth story but without the need to decide at the out start, which markets to invest and when."
HereÆs how it works.
The manager will invest the fundÆs assets in the Hang Seng Index, the Nikkei 225 Index and the KOSPI 200 Index with an aim to offer investors a target potential return of 10% per annum, as long as the best performing index in the fundÆs basket of indices achieves 5% return or more that year since inception.
If the best performing index records a performance equal to or above 5% at the end of year one, investors will receive a potential return, which is 10% for the first investment cycle or the higher of prevailing net asset value. Once the target is achieved, a new investment cycle will start.
Of course, thereÆs a caveat. If the best performing index records a performance less than 5% at the end of year one, the fund will continue its investment strategy with an aim to achieve a progressive potential return of 20% and 30% for year two and year three respectively. What is required is for the best performing index in the fund's remaining basket of indices to achieve a 5% or more return at the end of year two or year three (as the case may be) versus the investment cycle start date.
This means if the performance of the best performing index is below 5% for all of the observation periods, investors will get a realisation price based on the performance of the final index, which may be a positive or a negative percentage after three years. Thus investors may receive less than their initial investment.
While past experiences are no guarantees of the future, Lyxor Asset managers point out that in the past 12 years out of the past 15 years, one or more indices recorded performances equal to or above 5%.
Offered until 3 March, the launch date is 8 March, with a base currency of United States dollars and a minimum investment of $3,000. ThereÆs an initial sales charge of up to 3%, with a management fee of 0.50% per annum.
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