Savings Product Review: OM-IP 220

Tuesday 7th February 2006

What is it called and what sort of savings product is it?
OM-IP 220 is an investment in a managed futures fund with a fund of hedge funds which also has a capital guarantee.

Who is the company behind it?
Sydney-based Man Investments is the company promoting this fund. This is the 11th fund in this series of investments.

Who is the target market?
Because these funds are not really stand alone investments, they suit people who want to have a portion of their portfolio invested in assets which have different risk and return characteristics to other parts of their portfolio.

What return does it offer?
Earlier OM-IP funds were marketed on the back of targeted returns, however this latest one isn't like that. Investors are pretty much ensured they will get their original investment back as the fund has a capital guarantee from National Australia Bank. Previous OM-IP funds have generated annualised returns (in New Zealand dollars) of anywhere between 2.9% and 16.2%, with the average being 10% across eight funds.

When was it launched?
February 6.

What other products is it like or is it competing with?
In many ways OM-IP funds are in a world of their own! In a diversified investment portfolio they sit most comfortably in the alternative investments category.

Is it long term, short term or medium term?
This fund has a fixed term of 11 years, however investors can sell early on the secondary market.

What is the unique selling point?
It's very different and it offers some diversity to traditional assets (shares and bonds) in a portfolio.

How strong a stomach do you need for it?
Mild as it has a capital guarantee and track record of these funds has been solid.

What's the hitch?
Fees - they are at the higher end of the scale, but at least they are well disclosed.

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