The first Goldilocks product launched in late 2009 with a closed-ended structure and was followed by a second tranche in 2010. Instead of opening a third tranche at the end of last year, Insch Capital decided to offer the product on an continual basis due to investor demand for the product following strong performance. By the end of October 2011, Goldilocks had generated positive year-to-date returns of 9.66 per cent at a time when many investments were struggling.
Goldilocks combines a structured product portfolio linked to the price of gold with the Insch Kintillo currency program. This enables investors to benefit from the inflation protection and growth potential of gold, while capturing currency movements through the computer driven currency program to enhance the overall returns.
Structured products linked to the GoldLNPM index will make up 80 per cent of Goldilocks. These will be issued by banks with a rating of at least A. The remaining 20 per cent is invested in the currency program, which treats currency as an asset class that can generate gains and losses. A 50 per cent stop loss, which is an investment tool that protects portfolios from further losses when trades have gone against them, will be triggered to protect half of this part of the portfolio.
Goldilocks will provide 90 per cent capital protection overall. Investors are protected on 80 per cent of their investment through the structured products and the protection on half the remaining 20 per cent through the stop-loss brings the total to 90 per cent.
Goldilocks may appeal to high-net-worth clients who are looking for diversification and to preserve 90 per cent of their capital. However, it is a sophisticated product that may not suit all clients who have the ability to meet its high minimum investment.