E D F & Man has introduced an offshore capital guaranteed bond aimed at high-net worth clients looking for growth.
Man-Glenwood nexus guaranteed is the first bond to invest in the Man-Glenwood portfolio, which came into being through ED & F Man's takeover of Glenwood3, an American investment adviser. The portfolio is made up of investment strategies covering hedge funds, futures and mergers and acquisitions.
Investors can choose whether to invest in dollars or Euros and this will affect the level of return they get and when the bond matures.
Investors in the dollar denominated bond are likely to receive a return of 14-16 per cent a year and the Euro denominated bond is expected to return a slightly lower rate of 13-15 per cent. This is because the two currencies have different interest rates. However, as the bond is geared by 50 per cent, the returns for all investors could be higher than the target return.
The bond is capital guaranteed so the original investment will be returned in full at the maturity date, which differs according to the currency it is denominated in.
The level of return is the best feature of the product, but the gearing of 50 per cent is high and this is where the element of risk lies.