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Matrix Peers Over the Hedge

Matrix Structured Products has established the Matrix ascension plan 3, a capital-protected hedge fund.

The fund has five-year term, which is shorter than the previous ascension plans. Investors will receive 100 per cent of the growth in the underlying Winton trading strategies fund, less the annual management charge of 1.75 per cent a year. They will also benefit from the return of at least 90 per cent of their original capital, less the 5 per cent initial charge, at the end of the term.

The Winton trading strategies fund is a mirror fund of the Winton futures fund managed by Winton Capital Management. This London-based commodity trading adviser manages approximately $5.4bn, but the Winton Futures fund is closed to new business.

The Winton trading strategies fund invests in over 100 global futures markets such as energy, base metals, precious metals, equities, currencies bonds and interest rates, using the same investment approach as the Winton futures fund.

Winton uses a sophisticated statistical analysis, which it regards as its main strength, alongside trading software. This provides traders with the knowledge they need to buy and sell on the futures markets at the right times. Using this approach, investment decisions more objective and shows how past events can be used to understand the probability of the same trend occurring in the future.

The futures markets have a low correlation to equity and bond markets, so may be useful in diversifying a client’s investment portfolio.

By offering this plan, Matrix continues to make the futures market accessible to a wider client base due to a low minimum investment level, a relatively high level of capital protection and tax efficiency. Returns are taxed as capital gain, so investors can use their capital gain tax allowance. The plan’s shares also qualify for inclusion in Isas, Pep transfers, Sipps and SSASs, which also broadens the product’s appeal.

However, the charges, the complexity of futures and Winton’s sophisticated investment strategy suggests interest may come from sophisticated investors, particularly those at the high-net worth end of the market and institutions.

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