Man Investment has introduced Man RMF Multi-Style Series 2, a capital-protected fund of hedge funds that is available in dollar and euro currencies.
This product is designed to perform independently of bond and equity markets by investing in a range of hedge fund strategies such as equity hedge, even-driven, relative value and managed futures. It aims for a target return of between 13 per cent and 15 per cent a year and provides access to the asset allocation and risk management skills of RMF. RMF, which was founded in 1992, is one of Man Investments' core managers and is responsible for assets of more than $15.8bn, mainly in hedge funds.
The underlying portfolio initially has a 50 per cent weighting in managed futures, 23 per cent in relative value strategies and the remainder in event driven, equity hedge and global macro strategies. It will be geared by 50 per cent with the aim of enhancing returns for investors, even when markets are falling.
Investors will get all their capital back at the end of the term in 2017 and will benefit from a profit lock-in feature. This means that the guarantee can increase beyond the capital depending on the performance of the underlying portfolio.
Investors can redeem their bonds monthly but if they do before October 31, 2010 they will pay a redemption fee which decreases from 4 per cent of the net asset value until October 31, 2006 to 1 per cent until October 31, 2010. After that investors can cash in their investment without penalty.
This product offers investors a very diverse hedge fund portfolio managed by experienced professionals with the added benefit of capital protection. This should lower the risks associated with hedge fund investing. However, despite Man Investment's attempts at transparency in publishing the asset allocation weightings for the portfolio, the underlying hedge funds may still suffer from a lack of transparency.