KEY POINTS:
What is it called and what sort of savings product is it?
Fallen Angels 2 is a capital protected savings product.
Who is the company behind it?
It is promoted by capital protection specialists Liontamer. Belgium-headquartered bank KBC Asset Management owns a 51 per cent stake
in the business. KBC is the 11th largest bank in Europe and is a major player in the capital protected product market.
Who is the target market?
Investors who believe the next few months present an opportune time to invest in the international finance sector, as currently prices are so heavily discounted, but who also want to minimise the risk of loss of capital.
What return does it offer?
The investment follows the fortunes of a select basket of global financial stocks and so has equity-like return characteristics. However, investors also receive 100 per cent capital protection at maturity on their initial investment.
When was it launched?
November 4.
What other products is it like or is it competing with?
It competes with other international share funds, but differs with its capital protection and the opportunistic nature of the investment strategy. The fund targets a group of well-known global finance companies (i.e. UBS, JPMorgan Chase, ING) that have fallen from grace and who now look like good value.
Is it long term, short term or medium term?
The fund has a five and a half year term.
What is the unique selling point?
It offers investors' access to a basket of stocks that have significant growth (as well as risk) potential while also providing that important 'sleep at night' factor through its capital protection feature.
How strong a stomach do you need for it?
The capital protection feature means the risk of your original investment losing value has been significantly reduced, therefore the downside is minimised while the return prospects are more in line with an equity-type investment.
What's the hitch?
Over the term of the fund, if the Index that tracks the basket of stocks does not rise then inflation will have eaten away at the real value of the investment. But that seems a small trade-off for capital protection. As a hold-to-maturity investment, capital is tied up for the investment period and there are early redemption penalties.
