Sunday Star Times

Product column: 29 May 2005

 

Product: TIGER Series 1

Offerer: Liontamer

Offer dates: Open until July 8

How it works: Liontamer provides synthetic growth investments with guarantees by investing the money in a series of fixed interest and derivative investments.  In this case, investors get the chance of 100% of the capital gains from a basket of Asian markets – 25% China 25% India, 12.5% Japan, 12.5% Korea, 12.5% Singapore and 12.5% Taiwan.  With those markets' history of disappointing Kiwi investors, the guarantee will be welcome.  In this investment money is tied up for five years.  Minimum investment is $5,000 and there is an entry fee of $150 for every $5000 invested.

What we like: If last century was the American century, the next belongs to Asia.  The region has 60% of the world's people, and they appear to be getting their act together.  There is a strong argument that we should be investing our wealth in the likes of India and China and creaming the profits.

What we don't like: If you need to get your money out early, your capital protection is forfeit and there'll be an exit fee.  Also, don't assume 100% of your money back in 5 years means you can't lose.  Assuming 3% inflation for 5 years, your $5000 would be worth $4295 in real spending power in 2010.  Also finance minister Michael Cullen has suggested that he will start taxing overseas investments through Australian unit trusts – which Liontamer uses – by April 2007.  That will have a dramatic effect on returns from this scheme, as it will on all overseas investments. 

Conclusion: Want to invest in Asian growth but are too scared?  This might be a way to consider.