Insch launches capital protected gold note
Insch Capital Management, in conjunction with Liechtensteinische Landesbank (Switzerland) and Prometeo, has launched Goldilocks: A Gold Note with Currency Enhancement as a new share class of Insch Insight, its BVI domiciled fund.
Goldilocks is the first investment to combine the inflation protection properties and upside potential of gold with a systematic means of capturing price movements in major currencies and offer capital protection.
Christopher Cruden, chief executive of Insch, says: “Whatever lies ahead for global economies and financial markets, investors must preserve capital, protect the value of their money and still participate positively in price movements wherever possible.
“As ever, gold is regarded as a safe haven, an inflation hedge and a currency in its own right. It seems natural to acknowledge these facts and prudent to incorporate the attraction of its ‘hard asset’ status with and enhancement of a balanced currency portfolio thus ensuring the preservation of capital without losing the potential for growth.”
Goldilocks is a hybrid investment tool: 80 per cent of the principal is allocated to a portfolio of gold notes, with a bullish view linked to the GOLDLNPM Index. This is combined with a 20 per cent principal allocation to an actively managed currency enhancement programme with 4:1 leverage.
The investor obtains full capital protection on the gold notes component (80 per cent of principal) and anticipates extra absolute returns from the attractive options structure. The currency component aims for consistent growth from the 20 per cent invested principal but only exposes a maximum of ten per cent of the principal to risk due to a trailing 50 per cent stop-loss system. For this reason, absent default by the gold note issures, investors receive 90 per cent capital protection.
Goldilocks will automatically redeem in five years but prior to that, investors have the benefit of monthly liquidity through the administrator or they may dispose of their holding via a secondary market facility maintained by Prometo which offers daily liquidity.
The banks issuing the gold notes are required to have a credit rating of A+ or better at time of issue. Liechtensteinische Landesbank (Switzerland) is the depository and payment bank and carries an AAA rating.
Goldilocks will be open for subscription between 26 October 2009 and 27 November 2009 after which no new subscriptions will be accepted.
Goldilocks is denominated in USD. Subsequent issues in EUR and GBP are planned. Minimum initial investment is USD200,000.
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