Savings Product Review: TIGER Series 2

Monday 24th April 2006

What is it called and what sort of a savings product is it?
The TIGER Series 2 Asian sharemarket fund. It is a fund which invests in Japanese shares but your capital is protected.

Who is the company behind it?
The fund is made and marketed by capital protected investment specialists Liontamer.

Who is the target market?
Investors who want exposure to the Asian growth story. With the capital protection it also appeals to the more cautious investors.

What return does it offer?
There�s three parts to its returns. Firstly being capital protected you will get your initial investment back even if the Japanese market falls. TIGER 2 is actually two funds. One has so-called Booster units which pay the investor 1.2 times the increase of the underlying index at maturity. The other Tracker units pay 100% of the rise of the index.

When was it launched?
February 20.

What other products are they like or do they compete with?
As the fund is capital protected it�s quite unlike any other type of investment and has characteristics of bond and share funds. It behaves like a bond when the market goes down i.e. it will deliver your capital back. And, it behaves like equity when the market goes up i.e. it delivers the returns of the sharemarket. In essence it competes with other Asian funds, but it also competes with other lower risk investments, like bonds and term deposits.

Is it long term, short term or medium term?
The Booster units have a five-year term and the Tracker units a four year term. Early redemption � at a discount � is possible.

What is the unique selling point?
The fund has Booster returns combined with protection. The Booster means you get 1.2 times the rise in the Tiger Index (all of the rise and one fifth as much again as an additional bonus). So if the market goes up, you win, by getting the rise plus a booster. If the market falls, you will get your capital back at maturity. That�s also a win, when other investors will have suffered losses.

How strong a stomach do you need for it?
Not strong at all. Because of its structure you will get your money back.

What�s the hitch?
Not too many hitches with this. One is that Barclays Bank defaults on the capital protection � with a AA rating the chances are low. Only your capital is protected at maturity. If you withdraw early you may get back less than you invested, as well as incurring an exit fee

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