In our Money@Work column we take a look at savings products available for investors and provide some general information to assist your research.  This week we answer questions on The Pathfinder Commodity Plus Fund which is a smart, new approach to investing in global commodities.

What is it called and what sort of savings product is it?

The Pathfinder Commodity Plus Fund is an open-ended option for investors to take on exposure to movements in the prices of raw materials with the benefits of a PIE scheme.

Who is the company behind it?

Pathfinder Asset Management, a New Zealand owned and operated which was the brainchild of Deutsche Bank veterans Paul Browsey and John Berry.

Who is the target market?

While your average retail investor can get into the fund with $5,000 through a wrap platform, to get into it directly, you’re need to put up $100,000.

What does the return offer?

The return is linked to the performance of world commodity prices on the Deutsche Bank Liquid Commodity Index Mean Reversion plus Access and denominated in U.S. dollars, so it can be pretty volatile as its June performance of a net 1.69% gain shows.

When was it launched?

Its first issue was on April 30.

What other products is it like or is it competing with?

There aren’t many products out specifically taking advantage of the empty commodity space, although investors can get indirect exposure by owning shares in companies that produce raw materials.

Is it long term, short term or medium term?

Take your pick, it’s open-ended so you can get out at the end of any given month.

What is the unique selling point?

Commodities – we produce them so we may as well invest in them. Pathfinder’s index follows crude oil, heating oil, aluminium, gold, wheat and corn.

How strong a stomach do you need for it?

If you’re concept of spicy is kiwi spicy, this might not be right for you. With no guarantee, you’re either playing the long game, or you’re very very sure we’ve hit the bottom of the slump.

What’s the hitch?

Commodity prices have been wild in recent times, and even if Browsey and Berry like to point out that commodities typically outperform the equity returns of companies involved in manufacturing or producing a raw product, we’re looking at one of the most volatile periods in the last 60 years.

More details on the The Pathfinder Commodity Plus Fund

What is it called and what sort of savings product is it?

Works Bonds are a three-year, fixed-rate unsecured unsubordinated debt security.

Who is the company behind it?

Downer EDI Ltd.’s New Zealand subsidiary Works Finance NZ is offering the product and is looking to raise $100 million, and can accept up to $50 million in oversubscriptions.

Who is the target market?

Retail and institutional investors can apply with a minimum holding of $3,000.

What does the return offer?

Investors will receive quarterly payments at 9.65% per annum.

When was it launched?

The bonds began trading on July 1.

What other products is it like or is it competing with?

A clutch of other corporate bonds that have been issued by the likes of Fonterra and Contact Energy.

Is it long term, short term or medium term?

It’s a three-year security, so take a medium-term approach.

What is the unique selling point?

Bonds in a Downer EDI company look reasonably good when a new government ramps up its rhetoric about spending in infrastructure.

How strong a stomach do you need for it?

With an investment grade rating of BBB- it shouldn’t cause too many tremors, especially with Downer Group as a guarantor.

What’s the hitch?

Will they look less attractive when interest rates begin to rise? Hard to say, but the experts are hinting we’re awfully close to the bottom of the trough.