Sunday Star Times talks Tiger

Financial product article: 19 March 2006

Product: Tiger Series 2 Asian Sharemarket Fund Trust 15

Offer dates: Closes to new investors on April 18

How it works: Liontamer is a Christchurch investment company which puts together capital-guaranteed funds giving investors exposure to markets all over the world. The latest is Tiger Series 2, which has investments in Japan (35%), Hong Kong (20%), India (20%), Taiwan (12.5%) and Korea (12.5%). Those are all the markets around the booming economy of China and are a way of getting a piece of that action, says Liontamer. It’s also a way of buying into the growing success of India, which will soon have more people speaking English as a first language than any other country in the world. The largest single investment is in Japan which has been on a roll. Minimum investment is $5,000. There are two types of unit. One is booster units, in which investors lock their money up for four years and get 1% growth for every 1% growth in the stockmarket indices the fund’s returns are linked to. The other gives a 1.2% return for every 1% return in the indices, but the investor has to lock their money up for the full five years. There is a 3% entry fee. The fund is bought through financial advisers or stockbrokers.

What we like: 100% guarantees suit some investors. You can’t lose your shirt, though inflation can eat holes in it.

What we don’t like: Investors taking their money out early pay exit fees. That’s the price of the guarantee.

Conclusion: Everyone’s putting their money overseas now as the local economy slows. This is one way of buying into global growth without risking too much.

Correction: please note the booster units described above pay 1.2 times the rise in the Tiger Index and the tracker units pay 1 x the rise. These were described in reverse, in the article.