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Investec launches new investment

May 11 2017 17:17

Cape Town - Investec has launched a new investment that gives investors access to a basket of international indices and offers principal protection of 105% in US dollars with the potential to earn enhanced upside, according to Japie Lubbe, of Investec Corporate and Institutional Banking.

He explained that the structure effectively ensures that investors have a positive return. An investor in the East Asian Growth Basket Limited will earn two times the growth in the underlying indices, from 105% to 127.5%, with a maximum total return of 150% in US dollars.

The minimum of 105% in US dollars will be paid where the basket of indices increases by less than 5% or ends negative over the 5 year term. The 105% is intended to compensate investors for the opportunity cost of remaining invested in an offshore cash deposit.

Lubbe added that all returns are quoted net of fees, costs and expenses.

"Our investors typically want something that is highly correlated to world equity markets. This is the index composition that we believe represents that and will drive the profit potential of the investment," said Lubbe.

The minimum investment in The East Asian Global Basket Limited is USD12 000 (US dollars) or AUD16 000 (Australian dollars).

The investment window is currently open and closes on June 15 2017, or when fully subscribed.

The shares of the East Asian Growth Basket Limited are listed on the Bermuda Stock Exchange and can, therefore, be sold before its scheduled maturity date in normal market conditions.

"This investment offers an attractive reward relative to the risk investors will be exposed to," said Lubbe.

"It's for those investors who are seeking exposure to equities if they are positive and who want to eliminate market risk if the markets do badly."

Investors take on the credit risk of Investec Bank in this investment.

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