Man Investments' new Diversified Opportunities hedge fund offers investors a choice of capital guaranteed bonds or share classes with dividends.
The fund provides access to a portfolio that offers risk-adjusted returns currently available within the Man Global Strategies' structured product range.
Man Investments stated: "Client feedback has indicated the desire for products with dividends, shorter maturity dates and the choice of whether or not to opt for a capital guarantee. MSG Diversified Opportunites has been structured to meet these needs within one product."
The product offers the choice of capital guaranteed bond classes and non-guaranteed share classes with fixed dividends of 4 per cent for the first four years and discretionary dividends thereafter. Both options provide access to the Man Global Strategies Diversified portfolio.
The bond classes of MSG Diversified Opportunities Ltd are offered in a choice of USD, EUR or CHF each targeting annualised returns of around 11-14 per cent (USD-class bonds), 10-13 per cent (EUR-class bonds) and 6-9 percent (CHF-class bonds) over the medium term, for a volatility of around 6-8 per cent (USD(EUR) and 4-6 per cent (CHF).
The bond classes offer the benefit of capital guarantees provided by Citibank NA London Branch that provide bondholders, for each bond outstanding and redeemed on the maturity date, with at least 100 per cent of their initial investment, as well as the benefit of a bond profit lock-in feature.
The share classes of MSG Diversified Opportunities Ltd are offered in a choice of USD or EUR-class shares and are targeting annualised returns of around 12-15 per cent (USD) and 11-14 per cent (EUR) over the medium term for a volatility of around 6-9 per cent. The share classes have the benefit of an annual, fixed dividend payment equal to 4 per cent of the purchase price of each share for the first four years. For the remaining years, an annual discretionary performance dividend will be considered up to the prevailing 12 months LIBOR (USD) and EURIBOR (EUR) rate.
MSG Diversified Opportunities Ltd will access the diversified portfolio of hedge fund managers currently offered by MAN Global Strategies, which seeks to improve the stability of potential returns by avoiding over-concentration in any asset-class, sector or strategy.
Christopher Möller, global head of sales and marketing at Man Investments said: "We are excited to be giving investors the chance to access the popular Man Global Strategies Diversified portfolio with the option of a capital guarantee or annual dividends. The risk profile of this product is very similar to that of binds, yet it has more upside performance potential. Given the growing concern about future increases in interest rates, this product may offer investors an interesting alternative."