ABN AMRO Asset Management is now launching its eleventh guaranteed fund in Hong Kong under the eye of a new product development manager for the region.
Pieter de Marez Oyens has recently arrived from the firm's headquarters in Amsterdam as regional head of product development, reporting to regional CEO Frank Kusse. He has been with the firm for five years in the Netherlands, where he was part of the global product development team.
He replaces Solange Rouschop, who has moved to Beijing to focus on business development for ABN AMRO's joint venture, ABN AMRO Xiangcai Fund Management.
The US dollar-denominated Asian Treasures Lock-in Guaranteed Fund is linked to the Hong Kong, Japan and Korea equity benchmarks and guarantees 109% capital protection after five years.
With interest rates creeping upward, the firm is now able to provide a higher chance of upside in its structured products - which it must provide to discourage depositors from keeping their money in the bank. This new fund invests 90% of assets into fixed income and 10%, after fees, in options on the three underlying indices. The participation rate won't be finalized until launch but is slated to be around 90%.
"A 109% guarantee is good," de Marez Oyens says. "It's not the top of what you can get in the market, and we could increase it, but then there'd be less invested in options and therefore less potential for upside."
The firm charges a 1.1% per annum management fee which, along with admin fees (total 6.2%) paid up front. The structure includes several lock-in periods that preserve (or, if you like, cap) gains that meet certain targets. The ultimate payout is the sum of the three baskets' monthly performance plus lock-ins, multiplied by the participation rate.