Kleinwort Benson Private Bank is setting up a range of onshore funds tracking major hedge fund indices in association with boutique Bespoke Financial Consulting.
The products, including the FTSE broad hedge fund and S&P broad hedge fund index-tracking portfolios, will be launched by Bespoke, with Kleinwort acting as investment manager. They will be in an onshore Oeic structure with fortnightly dealing.
The groups are jointly marketing a commodity index tracker which offers a 100 per cent capital guarantee and participation of between 110-120 per cent, based on gearing.
With returns based on the Dow Jones AIG Commodity index, the vehicle pays up to 5 per cent commission and launches in November.
Kleinwort chief investment officer Jonathan Kent says the FTSE broad hedge fund index tracker will launch in the first quarter and offer 80 per cent capital protection based on a constant proportion protection model. This means the minimum return will rise as gains are locked in and it will target low double-digit annualised returns.
The two firm's first fund, tracking the S&P directional/ tactical hedge fund index net value, has now launched after raising £15m.
Kent says this will be followed by a tracker with returns based on the S&P Broad Hedge Fund index targeting a low double-digit return and a structured product with returns linked to a basket of hedge fund indices.
Kent says: “Hedge funds move in a different way to equities and bonds so are a good way to diversify a portfolio and the funds are FSA regulated and are eligible for Isa and Peps.”