London-based Matrix Group will launch the Matrix Ascension Plan 3, linked to the Winton Trading Strategies Fund, on Monday 17 July, subject to FSA approval.
Bridget Guerin, a director of Matrix Group, said: "In response to demand from IFAs we are offering Ascension Plan 3 with a five year life and a lower annual deduction factor than with previous Plans. The capital guarantee is 90 pence per share."
This new structured product, which closes on Thursday 17 August, aims to provide investors with a minimum payment of 90 pence per share when the product matures in five years time, on 31 August 2011, plus the growth of the Winton Trading Strategies Fund, minus a deduction which is expected to be 1.75% a year. All new Shares will be listed on the Channel Islands Stock Exchange.
The returns on the Matrix Ascension Plan 3 are linked to those from the Winton Trading Strategies Fund. The Winton Trading Strategies Fund has increased in value by 26.91% since launch in July 2004. This fund's strategy is the same as that of the Winton Futures Fund.
The Winton Futures Fund trades a portfolio of more that 100 international markets, including but not limited to futures, options and forward contracts and other derivative and financial instruments in commodities, currencies, government bonds, interest rates and equity indices. The Winton Futures Fund, and consequently the Winton Trading Strategies Fund, are largely non-correlated with traditional investments, i.e. equities and bonds, and therefore investment in the Ascension Plan 3 can provide risk diversification to an investment portfolio.
Guerin said: "In these times of volatile stock markets and difficult bond markets, we believe that a product that offers largely non correlated returns to equities and bonds has a place in private investors' portfolios. The reason for this is that in periods when either equities or bonds fall, the Winton Futures Fund return should not behave in the same way, providing good protection to a shareholder's overall portfolio. Over the period from the launch of the Winton Futures fund in October 1997 to the end of May 2006 the correlation of the Fund to the FTSE All-Share Index is 0.05% (almost no correlation) and to the FTSE 5-15 year Gilt Index is 0.35% (showing low correlation)).'
The product has a limited offer period that closes on 17 August. The shares qualify for inclusion in PEPs and ISAs, SIPPs and SSASs, although Matrix is not providing these wrappers. Returns on investments held outside these wrappers will be subject to Capital Gains Tax. The set up and running costs of the closed ended company from which the shares are issued are indemnified by the Manager, Matrix (Bermuda) Limited.