Man AHL Guaranteed Futures – run by AHL, one of Man’s core asset managers – has a minimum investment of $5,000. The product offers a capital guarantee from HSBC of at least 90% of an investor's initial investment when the product matures on November 30, 2011, and will be offered from August 21 to September 18.
A profit lock-in feature means the guarantee could rise to 100%, although it will not go above that, because Man wants to retain greater potential upside for the investor, said Giselle Lee, Hong Kong-based head of sales at Man Investments, at the press launch.
It is the only Hong Kong-authorised futures and options fund to provide downside protection, she added. “A five-year fund that does not offer a 100% capital guarantee may not seem all that attractive initially, but we expect it to perform well,” said Tim Wong, London-based head of AHL, at the press launch.
Man is targeting double-digit returns for the new product, said Matthew Dillon, managing director for Asia-Pacific at Man Investments in Hong Kong. The fund will closely track the main Man AHL Diversified Futures fund, although it will underperform it slightly in view of the guarantee, he said.
“This product performs like an unguaranteed fund, whereas other guaranteed funds launched in Hong Kong have not performed all that well,” added Dillion. “But people should buy the fund for the performance and diversification it offers, not for the guarantee.”
He acknowledged, however, that the average retail investor – especially a first-time investor – wants the comfort that a guarantee provides. The fund charges a 3% management fee and 20% performance fee. Man has plans to launch products elsewhere in Asia, including in China, Korea and Singapore, said Dillon.