GF Securities is marketing a quantitative hedge collective asset management scheme in China, the firm's first product using the constant proportion portfolio insurance (CPPI) strategy.
The product invests in stock index futures and high-yield small and medium-size enterprise (SME) private placement bonds to improve risk control while enhancing the potential value of the product.
The product will constantly adjust the proportion of bonds and equities investment. The ratio of equity, equity fund, hybrid fund, warrants and other risky assets will be dynamically placed between 0% and 50% of the total assets, with the proportion of warrants being maintained at or below 3%. The proportion of callable bonds, reverse convertible bonds, corporate bonds, governments bonds and other fixed-income financial products will be placed between 0% and 95% of the total assets, with the proportion of SME private placement bonds being maintained at no more than 30%.
Subscription for the product will expire today. The minimum investment is CNY10,000 (US$1,581) and the product is expected to raise up to CNY5bn (US$790m).
GF Fund Management, a subsidiary of GF Securities, issued its first CPPI fund in February 2011. It has risen 2.26% so far this year, taking returns to 4.73%.