ABN AMRO launches new retail product Elixir II
Structured products that offer investors a mix of growth opportunities and capital protection are expected to challenge traditional fund manager offerings as uncertainty in global equity markets escalates, according to ABN AMRO.
ABN AMRO launched its Elixir II Securities, a growing breed of retail products designed to provide retail investors over-exposure to the better performing asset class, enhanced participation returns and 100% capital guarantee.
Elixir II Securities, an advanced local structured product, guarantees from the outset that on maturity in 2012 investors will benefit from the better performing portfolio that is either overweight in international equities, global property or commodities.
Asset allocation is made at the end of Elixir’s five-year maturity which means investors effectively invest with the power of hindsight to enjoy capital growth achieved by the portfolio.
Using Elixir II Securities, investors are also assured diversification across global asset classes.
They present an ideal -set and forget- product for growth investors not prepared to pick the market during times of such uncertainty.
Each of the three asset-weighted portfolios are directly linked to index movements that reflect performance of underlying stocks pertaining to equity, property and commodity markets throughout the US, Europe and Asia-Pacific.
Custom built to meet demands from high net worth investors, Elixir II Securities feature an enhanced participation rate, an option for a 7% annual coupon and an automatic profit lock-in mechanism.
Enhanced participation rates magnify investor returns at the end of the five-year term, while the 7% income coupon is contingent on each portfolio achieving growth in excess of 10% for that year.
The automated profit lock-in is triggered and securities redeemed when growth in any of the three portfolios exceeds 25% in its first year, 35% in its second year or 45% in its third year.
Investors are also insulated from shorter-term index down-turns, as portfolios are judged solely on their performance over their final 12 months.
As investors are charged no fees over the product’s full life, ABN AMRO funds Elixir II by hedging its obligations to investors using swaps and options over the five-year investment term.
Elixir II Securities close to investors on 17 September 2007, however early bird investors who invest prior to 3 September 2007 will receive 8% annualised interest until the securities are issued on 24 September 2007. The minimum investment in Elixir II Securities is A$20,000 and the investment term is five years.
23-Aug-2007