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1 June, 2008Euromoney GCC asset management guide: Gulf economics and the asset management industry
1 June, 2008New product
Quattro Asset Management Vault 08
What is it?
It’s a capital protected product linked to global investment strategies.
What strategies?
Five UBS approaches, not normally open to retail investors. They include a global buy-write strategy, where you use call options to improve your return; a long-short approach, which allows you to make money in falling markets; and a currencies strategy.
Are they any good?
These strategies have never been computed in Aussie dollars in the past, so you can’t judge exactly, but according to UBS it’s done 9.69% a year over three years. This product aims to leverage exposure up to twice the investment amount.
Why would I need capital protection then?
In an uncertain market some people like the security of capital protection – though others argue that a low in markets is precisely the wrong time to pay up for protection. Quattro allows you to borrow 100% of the investment up front, which has a tax advantage. It charges 10.6% interest on the loan, from UBS, for the five-year life of the product.
What are the costs?
0.76% management fee, a 0.51% trail fee, a 0.26% expense recoveries fee and a 0.3% put option fee. Also a one-off 0.41% establishment fee. Quattro reckons that “typically capital protected investments require an overall return of 11% per annum for investors to receive a return. Vault 08 has reduced this breakeven return point by almost 50%.”
How much and when?
Offer open until June 23; minimum investment $10,000.
