Structured product provider Dawnay Day Quantum is launching the UK retail market's first structured offering linked solely to the Chinese stockmarket, the FTSE Xinhua China 25 index.
The fund offers investors 90 per cent capital protection at maturity and 70 per cent of the growth of the index which consists of companies trading on the Hong Kong, Shanghai and Shenzhen stock exchanges. The investment term is six years, after which the final value of the index is calculated as an average over the last 18 months.
Minimum investment, which must be made by April 16, is £5,000 for retail investors and £25,000 for professional investors.
Commission is 3 per cent and can be rebated into the investment to achieve a net price of 97 per cent.
Managing director Mark Mathias says: “China is already the world's biggest producer of TVs, radios, motorcycles and mobile phones. Yet most portfolios have a very low China weighting – if any.”
Chartwell Investment Management director Sue Whitbread says: “I think it is quite attractive and innovative. The only concern is the index but that is the risk/reward trade-off with these products.”