Money at work: Liontamer Fallen Angels 1 Fund
Sunday, June 01, 2008

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What is it called and what sort of savings product is it?
The Liontamer Fallen Angels 1 Fund is a capital-protected fund that invests in a basket of 16 global companies, which it considers to be oversold relative to underlying value. It was launched on April 16 and closes on July 11. The fund has a 5 1/2-year term.

What is the company behind it?
Liontamer is the leading provider of capital- protected funds here. Belgium-headquartered bank KBC Asset Management took a 51 per cent stake in the business last year.

Who is the target market?
People who believe this is an opportune time to invest in international shares but remain a bit nervous about global markets.

What return does it offer?
It offers two unit types linked to a basket of 16 stocks, which Liontamer believes have been oversold and represent good buying. One of the units has a booster feature that can accelerate gains by 1.3 times. While potential gains are unlimited, investors can also choose to have either 90 or 100 per cent capital protection.

What is it like or is it competing with?
It competes with other international share funds, but differs with its capital protection and the opportunistic nature of the investment strategy. The fund targets eight big banking firms plus eight global brands that have fallen from grace and had their share prices hammered, unjustly in Liontamer's view.

What is the unique selling point?
The fund provides two levels of security of invested capital but also offers strong growth potential, meaning it has excellent return prospects for the risk level. A new feature called "Smart-start" allows investors to benefit, even if the index drops in value in the first six months of the investment term.

How strong a stomach do you need for it?
The capital protection feature means the risk of your original investment losing value has been reduced, while potential returns have been enhanced by the booster feature. Downsides include capital being tied up for 5 1/2 years and early redemption penalties.