London-based broker Cornhill Asset Management has entered the structured products market with a principal protected commodity-linked bond.
The Cornhill Capital Guaranteed Note is a three-year note, issued by Deutsche Bank, that returns capital at maturity plus a participation in any rise of the Deutsche Bank Liquid Commodities Index Mean-Reversion Plus (LCI-MR Plus).“We were looking for something a bit different to offer our clients at a time when markets are very volatile but opportunities still exist for growth,” explained product coordinator Andy Houchin. “That is why we opted for capital protection with an underlying commodity index. It can be a very expensive and complicated product to access and we wanted to widen the reach to incorporate our clients.”
The underlying is a rules-based strategy comprising crude oil, heating oil, aluminium, gold, wheat and corn. The index overweights 'cheap' commodities and underweights 'expensive' ones by comparing their respective five-year moving averages versus one-year moving averages.
Cornhill will receive a fee of up to 5% from the Issuer (Deutsche Bank AG) for distributing the note.
This product will appear in Recent Additions (UK).
