The fund, called COMBI Series 7, provides the usual capital protection at maturity and is targeting a boosted exposure of 130%, or 1.3 times any growth in a basket of energy, metals and soft commodities. The fund was originally designed with existing clients in mind, but Liontamer has now opened it up for wider investment.
"We launched COMBI Series 7 mostly as a rollover opportunity for investors in our COMBI Series 3 fund which matured last week" said Janine Starks, co-managing director of Liontamer. "Investors in that fund have benefitted from generally rising commodity prices over the investment term and the fund has generated a return of just over 47% at maturity. The high take-up of investors rolling into the new fund has encouraged us to give it wider market access."
The COMBI Series 7 product is Liontamer's 37th retail offer, making the fund manager one of the more prolific issuers in recent years. "We've certainly had some experience creating commodity-linked funds and believe an exposure to this asset class can offer a range of potential benefits, particularly as a hedge against inflation" says Starks. "Rising inflation may soon be of concern as the flow-on effects of stimulus packages and loose monetary policies introduced during the global financial crisis, and which are broadly still in place, are felt throughout the global economy."
On the broader economic environment Starks had this to say, "We currently see a period where we are witnessing a two-speed economic recovery, with high levels of policy stimulus still in place yet low growth and low inflation in developed nations and mid-to-high growth and inflation prevailing in developing economies."
"In our view, pressures around European and particularly Greek debt are likely to persist for a while longer, but although European debt problems could worsen before they improve, we do not believe they will derail the recoveries in global economies and markets. We believe that the combination of a muted, albeit two-sided, economic recovery and continued policy stimulus sets up a constructive environment for commodities, at least in the near term."
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