tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Sunday, June 23rd, 2:52PM

News

rss
Latest Headlines

Liontamer goes for a knockout

Liontamer has launched a new fund which is a bit of a departure from its normal diet of capital guaranteed product, linked to an index. But in keeping with tradition the new fund is imaginatively named. The Knockout Series One fund's objective is to provide a high potential coupon, which will be paid even if a particular sharemarket has low or zero growth.

Wednesday, July 16th 2008, 7:34AM
In addition to that there are opportunities, in the fund's five year term, to mature early.

The key difference between this fund and earlier Liontamer products is that the return element is converted into a coupon, or fixed interest type return, rather than an equity one.

Liontamer says the fund has the potential "to enhance portfolio returns in an otherwise low return environment."

Liontamer's investment director Janine Starks says it is still an equity-linked product.

She sees Knockout as being part of an equity allocation in a portfolio, although some people may prefer to use it as "a cash replacement" allocation.

The fund is offering a potential 12% annually, but in a compounded coupon rate which builds up over the five year term of the investment.

Payment of the coupon is dependent on the performance of a basket of Europe's 50 leading blue chip companies, as measured by the Dow Jones EURO STOXX 50 Index. If the level of the index is the same or higher than its starting level in a year's time, investors will earn the 12% coupon. If it does this the fund will close early - that is it will be a "knockout", with a full return of capital.

If the index doesn't maintain its value, investors stay invested for another year and the same test applies. Each year Liontamer compares the index to its starting level on the anniversary of the fund. There are five opportunities (one each year) to earn the high coupon and achieve a knockout (maturity of the fund).

If this happens at the end of Year Two the coupon jumps to 24%, if it happens at the end of Year Three, it's a 36% coupon, Year Four is 48% and Year Five is 60%.

Starks says the fund only has to be the same or ahead at each anniversary date to score a knockout. She says only the most bearish and pessimistic investors would believe that this index will go backwards for five years. Backtesting shows that there is an 80% chance this fund will payout in the first two years (however that is no guarantee that is what will happen).

Like with other Liontamer funds this one has capital protection, but only to 50%. The protection is provided by Liontamer's parent, KBC Bank.

« Calls to standardise KiwiSaver rejectedSovereign takes regulation bull by the horns »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Weekly Wrap

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - ▼6.99 ▼6.49 ▼6.29
ASB Bank 8.64 7.14 6.75 6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.74 7.35 6.99
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.65 7.25 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.74 7.09 6.95
SBS Bank Special - 7.14 6.49 6.35
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.84 7.35 6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.24 6.75 6.39
Median 8.64 7.19 7.17 6.65

Last updated: 20 June 2024 10:39am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com