New structured product from Credit Suisse
Credit Suisse has teamed up with Pimco, the 2007 Money Management/IMCA Fixed Interest (Diversified) Fund Manager of the Year, to launch a structured product offering access to bond fund investments delivering high yield.
Features of the Principal Protected Yield Fund include capital protection and incorporated leverage to boost returns.
The fund has a maturity term of four years, and capital invested in the product is fully protected over this timeframe.
Credit Suisse Australia Fixed Income head of retail structured products Nick Buckland said: “Financial advisers are looking for ways to increase the returns from their clients’ defensive investments without taking excessive risk.”
The offering will use an allocation of 50 per cent to global bonds, 25 per cent to high yield bonds and 25 per cent to emerging market bonds, with Pimco managing the investments.
“We are very pleased to have been appointed by Credit Suisse to manage the underlying funds within the Principal Protected Yield Fund. This marks a particularly innovative way for retail investors to capture the value-add that Pimco has demonstrated to our clients here in Australia over the last 10 years,” Pimco Australia senior vice president, head of retail investments, Peter Dorrian said.
Through the use of leverage, the fund will have between 100 and 200 per cent exposure to the underlying bond investments, with the appropriate level being determined by performance.
“Providing internal leverage in the fund is likely to be particularly attractive to self-managed superannuation funds, which can’t otherwise borrow to invest,” Buckland said.
Investors looking to participate in the new structured product can do so with a minimum initial sum of $20,000.
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