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Product matters

The product offers investors 200 per cent of the rise in a balanced portfolio of physical commodities and natural resources – one-third in oil, one-third in gold and one-third in industrial metals. There is unlimited upside potential and full capital protection (subject to counter-party risk) over the five-year term.

It is denominated in sterling, so removing the currency risk. Since it has no initial commission payments and has a relatively high minimum investment level, it will tend to appeal more to fee-based operators, discretionary fund managers, private clients stockbrokers, etc.

However, it is ideal for investors who want to have direct exposure to commodities, with the advantage of low correlation with traditional assets.

Investors can generally access only mining or natural resource company stocks and it has proved difficult to gain exposure to physical commodities. Although prices have risen sharply, demand for commodities and oil could continue to escalate. There is even talk of the gold price reaching $500. Any investment that can give exposure to this sector, while offering security of capital, deserves consideration and Close should achieve the minimum size required of 20m.

Michael Owen is joint managing director Plan Invest Group

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