Man AHL Guaranteed Futures 3 Ltd. will trade mostly futures and option contracts on currencies, bonds, stocks, interest rates, metals, energy and agricultural products using computer-driven models, according to a fund sale brochure.
Credit Suisse Group will provide a guarantee for 90 percent of the initial investment in the dollar shares of the fund. The Australian dollar shares will be 105 percent capital guaranteed.
A 22 percent decline in Hong Kong's Hang Seng Index since its Oct. 30 peak is forcing the city's residents to reduce stock holdings and seek capital protection of their investments.
``We're seeing strong demand for products that allow investors to diversify away from equities,'' said Giselle Lee, head of sales for Man Investments (Hong Kong) Ltd. The protection of the initial capital investment adds comfort, ``especially for first-time investors in alternative products.''
Managed futures funds bet on the directions of markets for various assets by trading instruments such as futures, options and forward contracts. Man Group began selling its capital guarantee fund in Hong Kong yesterday.
Eurekahedge's CTA/Managed Futures Hedge Fund Index gained 9 percent this year, based on preliminary data through May, making it the best-performing strategy and beating the 0.25 percent increase in the Singapore-based company's broader hedge fund index.
Man's AHL unit began selling its managed futures products to Hong Kong individuals with Man AHL Diversified Futures Ltd. in May 1998. The fund reported a cumulative total return of 285 percent between May 12, 1998, and April 30 this year. It beat the 148 percent total return of Hong Kong stocks and 27.5 percent gain of world stocks, Man said in a statement.
AHL is one of the world's largest managed futures fund managers, overseeing $20.9 billion of assets.
