Financial Product
Offerer: Liontamer Investments Offer dates: Open now, but closes on July 11 How it works: Liontamer, which is owned by Belgian bank KBC, has become known for its clever themed funds. This one it is dubbing its food and fuel fund. It is designed for investors to get exposure to six “essential” commodities. These are sugar (which makes up 12.5% of the exposure of the fund), soya (12.5%), corn (12.5%), wheat (12.5%), natural gas (25%) and Brent crude oil (25%). Commodity prices, and food in particular, have surged in the past year. The food story has been driven by two factors, which show no sign of letting up Liontamer says. The first is growing wealth in, and demand for, food from developing countries, and the second is the rise of biofuel, which now competes with food production for arable land. The oil and gas story is driven by the huge economic and industrial growth in emerging markets like China, India, Central Europe and Latin America. As with all Liontamer funds, investors do not get direct exposure to the assets they invest in. What they get is exposure via a “financial instrument” – a contract with KBC. The terms of that instrument will provide investors with between 105% and 150% exposure to the growth in the basket of commodities. There will also be a 100% capital guarantee for investors who do not cash up before the end of the five-year term. What we like: An ingenious theme investors can easily grasp. What we don’t like: Not really a criticism, but food for thought. Some might find themselves with ethical quandaries over playing any part in speculating on food prices. Conclusion: Likely to be a popular fund among those with a keen understanding of global economic and political themes, and those who want to invest, but are feeling a bit risk adverse.
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Product: Combi Series 5
