EMERGE Series 2 provides exposure to a variety of countries that are preparing
to become major players on the world’s economic stage. Perhaps the two best
known are China and India, who, along with Brazil and Russia, make up the BRIC
nations, widely considered the leading up-and-comers in the global economy.
However, there are many other important developing economies with significant
investment potential, such as Mexico and South Africa, as well as countries in
Southeast Asia, Eastern Europe and South America.
Key Features
Status
Closed to new investment
Structure
Australian unit trust (only open to New Zealand residents and investors in
countries outside of Australia to whom it is lawful to make an offer)
Index
The performance of the Emerge Smart Index is linked to more than 20 different
emerging markets via a listed emerging markets index fund. The level of exposure
to movements in this fund varies each day because the Emerge Smart Index employs
a ‘Smart-Exposure’ feature to manage volatility.
Growth
100% of any positive rise in the Emerge Smart Index at maturity
Capital protection
Full capital protection at maturity*
This means 100% of your capital will be repaid at maturity (after any entry fee
paid), even if the Liontamer Emerge Smart Index falls in value. Protection is
provided by leading UK banking institution, Barclays Bank PLC.
Term
6 years
Minimum investment
$5,000
Smart-Exposure
Liontamer’s innovative new Smart-Exposure feature aims to provide a more
intelligent method of generating returns from emerging markets. When the markets
are showing steady, more stable, daily movements, the Smart-Exposure strategy
increases the extent to which our Emerge Smart Index tracks the listed emerging
markets index fund. Exposure can be over 100% - boosting the daily movements.
When the markets become very risky and returns are increasingly volatile, the
strategy reduces the Emerge Smart Index’s exposure to below 100%. At the
extreme, we can even have no exposure at all (0%) until things stabilise. This
happened during the recent credit crisis and prevented large losses.
0-200% exposure
The level of Smart-Exposure changes daily and can be between 0% (no exposure to
the listed index fund) and 200% (double the exposure). In order to fix the level
each day, a simple formula is used. It measures the size of the absolute daily
returns of the listed index fund for the previous 40 days (ignoring whether the
movements are positive or negative). Larger returns are used as a signal that
market volatility is rising and exposure is reduced.
Entry fee
(this is a fee paid by you)
3% (unless rebated by your financial adviser)
Brokerage
(this is a fee paid by Liontamer)
2% fee paid by Liontamer to your financial adviser
No on-going annual brokerage is paid
Management fee
No annual management fee
Maturity Information
Investment date
15 January 2010
Starting index level
100
Maturity date
15 January 2016
(proceeds will be available within 10 business days)
Final index level
To be determined at maturity
Hold to maturity values
$1.00 Units
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Hold to Maturity Value
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
Emerge Smart Index
90.632
95.756
94.624
86.515
86.371
88.363
85.163
Note: all levels are at month-end, unless otherwise specified.
Valuation Tools
Note: this chart shows the hold-to-maturity values only. Please see a definition
of this below. The values are not market values or exit values. Please remember
that past performance should not be used as a guide to the future, and final valuations
are subject to market movements between now and the relevant maturity date.
Important information
Hold-to maturity values
The hold-to-maturity values shown on the table above are not a market value or a
value at which investors can exit the fund. They represent what the value of
each unit would be assuming it was maturing today and had been held for the full
term. By making these assumptions, we can provide a hypothetical value which
reflects the relevant level of capital protection plus the formula of returns
which apply at maturity. We calculate this by adding together the accrued annual
return and any growth in the underlying index, since the start date of
investment. We take into account the participation rate of each fund when making
the calculation i.e. the level of exposure the fund has to the index. The
hold-to-maturity value gives investors an indication of how their investment is
performing at the time the calculation is made.
Values prior to maturity
As capital protection only applies at maturity, the value of units prior to this
date is a maximum of $1.00, less a 2% exit fee and any break costs involved in
selling the investments held by the fund. Based on the restrictions imposed on
the transferability of the units, a reasonable view is that the ‘market value’
of each unit can be determined and it will not exceed $1.00 before maturity.
Early exits
Early exits are possible from all Liontamer funds and monthly exits are
available for this fund.
Unitholders can request an early repayment for any reason based on the current
value of the assets of the fund (which could be above or below $1.00) less a 2%
exit fee.
Transfers to other investors
Units are transferable and are not subject to transfer restrictions. Your Units
can be sold or transferred to another person prior to the Maturity Date. You
will be required to complete an Off-Market Transfer Form. Please contact your
financial adviser or broker to arrange a transfer. If you don’t have an adviser
or broker, contact Liontamer Investor Relations on 0800 210 451 or email us at
info@liontamer.com
This should be sent to our Registrar at the following address:
Link Market Services
PO Box 91976
Auckland 1142
New Zealand
Disclaimer
*Capital protection at maturity means you will receive back 100% of the combined
amount invested and early bird interest (earned during the offer period) less
any entry fee charged (up to 3%) and any exit fee. Capital protection only
applies at maturity. Early withdrawals may result in investors receiving back
significantly less than they put in, due to market movements, the exit fee and
the fund’s establishment costs. There is a more detailed description of capital
protection in the Investment Statement 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.
Barclays Bank PLC does not guarantee repayment of the investment amount or any
returns on the investment nor do they accept any liability to investors.
However, as the Fund Asset Provider, Barclays Bank PLC is legally liable to pay
to Liontamer as trustee of the fund, the investment amount plus any returns for
the Protected units and the formula of returns for the Unprotected Units.
