Absolute Alpha will launch a new capital-guaranteed fund in Australia this month to fulfil demand from financial planning groups.
There are three sub-funds in the new Advantage Fund Series fund – the Advantage Emerging Markets Fund, the Advantage Hedge Fund, and the Advantage Commodity & Energy-linked Assets Fund – all with partial capital protection and a planned 15% to 20% pa return.Chief executive Shawn Richard said, “A number of dealer groups had asked us to develop a structured product for them, based on the fact that we have not been seeing the negative returns many hedge funds have been getting. They want the upside of what we’re offering in the market, such as emerging markets or hedge funds or commodity or energy-linked assets, but without the risk of anything going wrong… they’ll [also] have the tax benefits these structured products provide.”
Capital protection is initially set at 80% of the principal, but will be fixed at the highest level ever achieved by the fund. “As the fund performs over time the 80% also rises, and you lock in a protection of principal and eventually lock-in a protection of profit,” added Richard.
