View more on these topics

Man bond unites hedge fund strategies

Man Investments has introduced Man AP unison series 1, a capital guaranteed bond that invests in multi-manager hedge fund strategies.

The Man AP product range was established more than three years ago with the introduction of Man-AP stratum. As many of the products in the range carry a capital guarantee, they tend to have a closed-ended structure. To keep investment opportunities open for investors, new bonds are issued and this is why Man AP unison series 1 was introduced.

Glenwood and RMF &#45 both subsidiaries of Man Investments &#45 will allocate the strategies to a range of hedge fund managers using a mixture of strategies, enabling the bond to perform in all stockmarket conditions.

The bond has a 12-year term and is available in euros or dollars. It has a target return of between 14 and 16 per cent a year, with around two thirds of the volatility of conventional stockmarket investments. It consists of arbitrage, managed futures, directional, equity hedge and long/short equity investment styles and the return of the original capital is guaranteed regardless of the performance of those strategies.

In addition to the capital guarantee, there is a profit lock-in feature which increases the amount investors are guaranteed to get back if the underlying investments perform well. The aim of this feature is to lock in approximately half of any profits the underlying investments produce.

Conventional stockmarket investments are unable to produce double-digit returns, and hedge fund strategies represent an alternative way of attaining higher returns. Man Investments&#39 combination of high returns with capital protection could appeal to high-net-worth clients who are reluctant to risk their capital. But one problem is the lack of transparency involved in the investment process, with the finer details of the investment process undisclosed.

Recommended

Smaller company fund sectors to be tightened up

Changes in the definitions of smaller company sectors are being proposed by the Investment Management Association after discovering that many funds are not operating within the set parameters.Sector monitoring by the IMA has found that many fund managers are breaching definitions which restrict funds to invest in companies falling under certain market capitalisation percentages. The […]

FSA to probe Pearl staff over misselling claims

Up to 35 Northern Scotlandbased sales staff at Pearl are being investigated by the FSA concerning allegations of sales irregularities.A spokesman for trade union Amicus which represents the workers says about 35 sales staff, the majority of whom are waiting for redundancy payments from Pearl after its salesforce was closed, are being investigated by the […]

IFAs back PI mutual but don&#39t want set-up costs

Most IFAs support industrywide mutuals providing professional indemnity insurance even if premiums were no cheaper than those currently available, says an FSA survey.But although 59 per cent say they would support a mutual scheme, 47 per cent would not be willing to contribute to set-up costs and 69 per cent say they would not join […]

HL makes call for AMP policyholders to take action now

Hargreaves Lansdown is warning AMP policyholders to act now if they want to hold on to any hope of future bonuses amid rumours of potential bidders for parts of the company.AMP plans to demerge its Australian and UK operations and will move its UK with-profits funds out of equities and into fixed interest. It has […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment