Type: Capital-protected bond
Aim: Growth linked to the performance of the Cru Africa Invest fund
Minimum-maximum investment: £4,000-no maximum, Isa £7,000, £7,200 from April 6, 2008
Term: Seven years
Return: 100% of the growth in the Cru Africa Invest fund
Guarantee: Original capital returned in full regardless of the performance of the underlying investment
Closing date: April 18, 2008, April 4, 2008 for Pep/Isa transfers
Commission: Initial 4%
This capital-protected bond is linked to the performance of the recently launched Cru Africa invest fund, which invests in commercial agriculture in Malawi to reduce poverty in the area.
Capital Trust Financial Management partner Bruce MacFarlane feels this investment has the potential to offer a win-win scenario for IFAs and their clients while providing a helping hand for some of the many poor in Africa. “This product offers IFAs a new and unique ethical investment to take to their clients at a time when market conditions offer little direction and make many traditional investment propositions look unattractive,” he says.
MacFarlane believes investors can feel good about an investment with capital protection and unlimited upside potential in the knowledge that while they profit, they are also helping to reduce poverty and provide new sustainable financial opportunities to thousands of people in Malawi.
“It is understandable that many investors have concerns about the economic and political stability of African countries and this has been addressed by attaching capital protection after a seven year term,” says MacFarlane. In his view, the adviser remuneration is fairly standard and the literature is attractive, clear and concise.
MacFarlane struggles to find any potential drawbacks. “This product ticks all the right boxes and there is little I dislike about the investment concept. Certainly, for small lump sums such as an investor’s annual Isa allowance, this product could provide a unique and interesting way to diversify a portfolio that my be very rewarding on many levels,” he says.
MacFarlane finds little in the way of competition for this product. “It is unique and I see little in the market that would provide direct competition. There are a number of managers now looking to invest in Africa such as new Star, but these are investing in quoted companies rather than in the development of a business to acquire and develop farms and farmland to provide marketable produce and directly reduce poverty,” he says.
Summing up MacFarlane says: “I hope this investment gets the support from the IFA community I feel it deserves and, given time, succeeds in meeting and surpassing its aims and objectives.”
Suitability to market: Good
Investment strategy: Good
Adviser remuneration: Good