Citigroup adds to Asian equity choice

Citigroup has added to this year’s flurry of Asian equity product, launching a structured equity product called Asian Income Plus (Yields3).

The first in a family of funds planned for launch under new Citigroup brand Equity First, Asian Income Plus (Yields3) is a six-year term product offering a targeted income of 12 per cent per annum, capital growth, and a 100 per cent capital guarantee on maturity.

Open for subscription from May 23 to July 26, the fund will comprise a portfolio of the 30 largest stocks from the MSCI AC Asia Index, selected on an annual basis.

Its trading strategy, dubbed the ‘Asian Income Plus Trading Strategy 111’, is based on a ‘buy-write’ strategy, a yield enhancement technique whereby covered call options are written over purchased stocks on a quarterly basis.

Citigroup’s head of equity structured products Michael Walker said Asian Income Plus is “suitable for income-seeking investors holding a view that Asian equity markets will show moderate growth or remain flat over the next six years”.

“In addition, the fund seeks to expose the investor to less risk than a direct investment in Asian equity markets by offering a 100 per cent capital guarantee on the maturity date.”

The Asian Income Plus fund has been designated a ‘Protection First’ fund within the new Equity First brand, by virtue of its capital guarantee.

‘Performance First’ and ‘Opportunity First’ are the two other risk designations offered within the Equity First brand’s in-built product ranking system.

Walker said the launch of the Equity Plus brand follows a decision by Citigroup to bring its distribution of its structured equity funds in house.

The preceding ORB International Enhanced Income Products (Yields1) and (Yields2) funds, both of which are now closed to investor subscriptions, was principally distributed by Capital Guarantee Investment Limited.