KNOCKOUT Series
1 (Trust 28) – Now Open
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 |
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| Term |
Five years, but subject to
early maturity |
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| 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. |
|
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| Structure |
Australian Unit Trust |
|
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| Minimum
investment |
$5,000
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| Currency |
New Zealand dollars |
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Key Dates
|
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| Closing date |
12 September 2008 (unless extended) |
|
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| Early
bird interest |
Paid to you until the investment
date. Interest is used to purchase
additional units for you. |
|
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* 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.
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