Liontamer doesn’t disclose how much money it raises in each of its offerings, however it is understood the previous commodities fund earlier this year was one of its most successful offerings.
The fund invests in a basket of between six and eight commodities with no less than a 10% weighting in each.
The commodities for COMBI 2 are Brent oil, natural gas, platinum, aluminium, copper, lead, zinc and nickel). It aims to lock in equal weightings of 12.5% of all 8 commodities.
COMBI 2 is for a fixed term, of between three and a half and four years (to be fixed when the investment starts), and the capital protection comes about because Liontamer buys a note issued by AA rated Barclays Bank.
Liontamer says if the prices of the commodities rise over the term of this fund, investors benefit by an even greater amount because it has an ‘accelerated' growth feature.
There is no maximum return, so the more the markets rise, the more the fund will benefit. If prices fall, your capital is fully protected at maturity.
Liontamer says this fund gives investors access to an asset class which previously was very difficult for people to put money into.
“It was just too tricky and quite honestly, a bit too risky for most of our liking,” Liontamer head of investment solutions Janine Starks says.
“Buying commodities outright, leaves you with visions of a delivery of oil barrels or tonnes of nickel on your back lawn. They are after all a real asset, you don't just get a share certificate, you own the real materials. In addition, prices can be volatile and there are large barriers to entry. It's simply not possible to purchase a basket of commodities in a small volume like $5,000.”
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