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Commodities fund captures investors' attention

Saturday 20th March 2004

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Protected investment specialists Liontamer say its innovative commodities fund has really captured the imagination of investors.

The company recently launched its COMBIgrow 100+ which offers investors 100% capital protection, and a return based on how well a basket of underlying commodities do over the life of the fund.

The commodities in the basket include oil and industrial metals.

Liontamerís head of investment solutions Janine Starks says the fund is a unique and low risk way for investors to get exposure to commodities.

ďIn the past the volatility of commodity prices has been the major factor which has deterred investors,Ē she says.

ďItís been possible to buy resource stocks, but you are then taking a punt on not only what they mine, but also their management ability and a currency punt as well.Ē

Liontamer has wrapped up a basket of base metals and oil with full capital protection and made it a New Zealand dollar investment.

Another unique feature of the fund is that it has an ďaccelerated upside.Ē

Whatís an accelerated upside? Starks explains: ď If the price of the basket has risen at maturity, youíll receive not only 100% of the rise, but an additional amount of acceleration as well.Ē

ďAt the moment weíre aiming for between 120% and 160% of the rise in the basket. An exact term and level of acceleration will be locked in once the fund closes.Ē

She says Liontamer can offer this feature because the forward prices of most commodities are below that of the spot price.

The fundís capital protection is provided by Barclays Bank which has a Standard and Poorsí AA rating.

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