Opalesque Industry Updates - Insch Capital Management SA has, in conjunction with Liechtensteinische Landesbank
(Switzerland) Ltd and Prometeo SA, launched “Goldilocks: A Gold Note with Currency
Enhancement” as a new share class of Insch Insight Ltd, its BVI domiciled fund.|
Goldilocks is the first investment to combine the inflation protection properties and upside potential of Gold with a systematic means of capturing price movements in major currencies and offer capital protection.
Christopher Cruden, CEO of Insch, said: “Whatever lies ahead for global economies and financial markets, investors must preserve capital, protect the value of their money and still participate positively in price movements wherever possible.
“As ever, Gold is regarded as a safe haven, an inflation hedge and a currency in its own right. It seems natural to acknowledge these facts and prudent to incorporate the attraction of its `hard asset’ status with and enhancement of a balanced currency portfolio thus ensuring the preservation of capital without losing the potential for growth.”
Goldilocks is an innovative hybrid investment tool: 80% of the principal is allocated to a portfolio of Gold Notes, with a bullish view linked to the GOLDLNPM Index. This is combined with a 20% principal allocation to an actively managed Currency Enhancement Program with 4:1 leverage.
The investor obtains full capital protection on the Gold Notes component (80% of principal) and anticipates extra absolute returns from the attractive options structure. The currency component aims for consistent growth from the 20% invested principal but only exposes a maximum of 10% of the principal to risk due to a trailing 50% Stop-Loss system. For this reason, absent default by the Gold Note issures, investors recieve 90% capital protection.
Goldiocks will automatically redeem in 5 years but prior to that, investors have the benefit of monthly liquidity through the administator or they may dispose of their holding via a secondary market facility maintained by Prometo which offers daily liquidity.
“Goldilocks could be compared to a straightforward trade with a risk/ return pay-off of that is substantially more attractive than otherwise available from the equity or debt markets” said Geoff Baker, Director and head of trading at Insch.
The banks issuing the Gold Notes are required to have a credit rating of A+ or better at time of issue. Liechtensteinische Landesbank (Switzerland) Ltd is the depository and payment bank and carries an AAA rating.
Goldilocks will be open for subscription between 26th October 2009 and 27th November 2009 afer which no new subscriptions will be accepted.
Goldilocks is denominated in USD. Subsequent issues in EUR and GBP are planned. Minimum initial investment is $200,000.