Liontamer

KNOCKOUT Series 1 (Trust 28) – Now Closed

KNOCKOUT Series 1 is a brand new fund brought to you by Liontamer Investments. It’s the first launch of a knockout fund in the New Zealand market – a concept that has proven hugely popular with investors all across Europe. As with our other funds, it is based on market performance, but this time the objective is to provide a high potential coupon, which will be paid even if a particular sharemarket has low or zero growth. Plus there is an opportunity for the fund to mature early, in each year of the five year term.

Liontamer designed KNOCKOUT Series 1 specifically for New Zealand investors as a new and exciting way to enhance portfolio returns in an otherwise low return environment.

How does it work?

Investors have the potential to earn a 12% coupon rate which builds up over the five year term of the investment (not compounded). Payment of the coupon is dependent on the performance of a basket of Europe’s 50 leading blue chip companies, as measured by the Dow Jones EURO STOXX 50 Index. If the level of the index is the same or higher than its starting level in a year’s time, you will earn the 12% coupon. Even better, the fund will close early (that’s the ‘knockout’) with a full return of capital.

If the index doesn’t maintain its value, you simply stay invested for another year and the same test applies. Each year we compare the index to its starting level on the day the fund began. You get five opportunities (one each year) to earn the high coupon and achieve a knockout (maturity of the fund). If this happens at the end of Year 2 the coupon jumps to 24%, if it happens at the end of Year 3, it’s a 36% coupon, Year 4 is 48% and Year 5 is 60%. For each year you stay invested, the coupon jumps up in value to compensate for the longer term.

Click on the icons to the right to get to a copy of our fund brochure and Investment Statement with application form.

Key Features

Fund Name

KNOCKOUT Series 1

Unit type

Jumper units

Term

Five years, but subject to early maturity

Index

Dow Jones EURO STOXX 50 Index

This is the leading blue chip index for Western Europe, and provides a good representation of the leading companies in that area. The index covers 50 stocks from 12 European countries: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. It currently includes such well-known giants as Nokia, AXA, L’Oreal, Suez, Total, and Unilever.

Coupon

The coupon payment is dependent on the performance of the Dow Jones EURO STOXX 50 Index. It is triggered by the application of the following process:

Each year on a set date in October, the index level is compared to its original level when the Trust commenced.
If the index level is the same or greater than when the
Trust commenced, the Trust is wound up and the coupon
will be paid.
If the index level is lower than when the Trust commenced, the coupon is not paid and the Trust continues for a
further year.

The test is repeated on the next anniversary and the coupon payable on maturity increases by 12% each year the Trust continues (not compounded).

As a result, if the Trust matures early in years one to four of the term, or reaches final maturity, the coupon payment will be (as a percentage of the investment amount):

Year one:	12% - fund matures early
Year two:	24% - fund matures early
Year three:	36% - fund matures early
Year four:	48% - fund matures early
Year five:	60% - maturity.

Only one coupon can be earned during the life of the Trust. As soon as the coupon payment is triggered, the Trust matures, the jumper units will be repaid and there is a full return of capital plus payment of the applicable coupon.

Conditional capital protection*

100% capital protected when a coupon is paid (i.e. where the coupon is payable at the Final Maturity Date, or following an Early Maturity Event, there is a full repayment of the investment amount as well as the coupon payment on the winding up of the Trust).

If the index level on the maturity of the Trust is less than the index level when the Trust commences, there is no coupon payment and the extent of capital protection depends on the performance of the Dow Jones EURO STOXX 50 Index as follows:

The Trust is fully protected from index falls of up to 50%. This is known as the 'Capital Protection Threshold'. So long as the Index remains at or above half of its original level during the life of the Trust (measured monthly over the five years) the 100% capital protection remains in place.
If the Index breaks the Capital Protection Threshold when measured, there is no capital protection and the Trust is exposed to fluctuations in the Index. The return of capital tracks the performance of the Index. The percentage loss of capital will be proportionate to the decline in the Index.

Early maturity feature

When the coupon payment is triggered, the jumper units will be repaid. If this occurs at the end of years one, two, three or four, this will give rise to an ‘Early Maturity Event’. There will be a full repayment of capital as well as the applicable coupon payment.

Early withdrawls

Quarterly exits are available on application at the discretion of Liontamer. Exiting the Trust (other than following a Maturity Date) will likely cause investors to get back substantially less than their original investment.

The value payable on an early withdrawal (except where exceptional circumstances exist) is the lesser of $1 per jumper unit and an amount based on the assessed value of the assets of the fund, less a 2% exit fee.

The $1 maximum value does not apply if exceptional circumstances exist.

Structure

Australian Unit Trust

Minimum investment

$5,000

Management fee

Nil

Entry fee

Nil

Currency

New Zealand dollars

Key Dates

Opening date

4 July 2008

Closing date

12 September 2008 (unless extended)

Early bird interest

Paid to you until the investment date. Interest is used to purchase additional units for you.

* 100% capital protected where an Early Maturity Event occurs and at final maturity unless the Final Index Level is less than the Starting Index Level and the Index Level has fallen below the Capital Protection Threshold (50% of the Starting Index Level) on any Observation Date. There is a more detailed description of the conditional capital protection in the Investment Statement (including an explanation of the terms used above) and the limited circumstances when capital protection may not be available.

Full details are contained in the Investment Statement and registered Prospectus, provided by Liontamer Investment Management Pty Ltd (ABN 23 104 174 325). Copies are available upon request from Liontamer Investor Relations on 0800 210 451. Early withdrawals may result in investors receiving back significantly less than they put in, due to market movements and the fund’s establishment costs.

Important
None of KBC Bank NV, KBC Asset Management NV or KBC Group NV guarantees repayment of the investment amount or any returns on the investment nor do any of them accept any liability to investors. However, as the Fund Asset Provider, KBC Bank is legally liable to pay to Liontamer as trustee of the Trust an amount equivalent to the Investment Amount and the Index Linked Return. Neither KBC Group NV nor any other member of the KBC Group guarantees the obligations of KBC Bank NV.