Sunday Star Times covers MONEYfund

Product: Capital protected income fund.

Offeror: Liontamer Protected Investments.

Key dates: Closes June 21 2004

How it works:
Called Money Fund, this is Liontamer's fourth capital-protected product and its first income investment offering after a run of growth products related to international shares. The Money Fund seeks to make money by movements in currencies and interest rates in international money markets. It does this by investing in an index set up by Deutsche Bank, which also provides the fund's capital guarantee. The index invests in three countries with the highest interest rates and borrows from countries with the lowest rates. When risk levels change, the index reverses its strategy to protect investor returns. The fund is designed to return 7% to investors for each of five years. Any out-performance on that figure is reinvested in the fund and returned to investors at maturity. The final target annual return is 12%. Based on five years' modelling research, Deutsche Bank reckons it has at least a 68% chance of achieving those returns. In the case of outperformance, the fund may mature before five years. The fund attracts a 3% entry fee and is available through financial advisers.

What we like:
The fact that there is security from Deutsche Bank. The fund also has a growth as well as an income element. In addition the fund is tax-effective for New Zealanders as an Australian unit trust.

What we don't like:
There are penalties for early redemption, and no capital protection for early redemptions, unless strong growth triggers early release. There is also the risk the government may change the tax rules and the fund's tax effectiveness could be wiped.