KUALA LUMPUR: AmInvestment Bank Group yesterday launched an unconventional capital protected fund called AmCommodities Active-Capital Protected (AACP) that has several unique features.
AmInvestment Bank Group chief executive officer and executive director (funds management) Datin Maznah Mahbob said it was one of the few local funds that invested in the commodity market for retail investors.
The fund has an authorised fund size of 200 million units at RM1 per unit and is offered to the public from Sept 8 to Oct 7.
The minimum investment amount is RM5,000.
AmBank Group chairman Tan Sri Azman Hashim (left) and AmInvestment Bank Group chief executive officer and executive director Datin Maznah Mahbob at the launch of the new fund on Monday.
The close-ended fund will invest mainly in three-year ringgit-denominated zero coupon negotiable instruments of deposits from financial institutions to ensure that 100% of investors’ capital was paid back upon maturity.
Maznah told reporters after the launch of AACP yesterday that 10% of the fund would be invested in an option linked to an actively managed commodity investment strategy to generate income and capital appreciation.
She said the strategy determined the allocation exposure of the portfolio based on a volatility management index called “Isovol Index” to a commodity index, AmIslamic Bank Makmur Commodity Index.
“The purpose of Isovol Index is to cap the volatility of exposure to the AmIslamic Bank Makmur Commodity Index at 15%.
“With this mechanism in place, the portfolio then manages the allocation of exposure to the Isovol Index at between 20% and 200%,” she said.
On the fund’s returns, Maznah said on average, investors could expect about 8% to 10% per annum based on track record.
“The fund would attract investors wanting exposure to an actively managed strategy in commodities investment and suit those seeking potentially higher income and capital appreciation over the longer term,” she said.
AACP is sold via AmBank branches, AmBank Financial Services and its authorised institutional unit trust advisers, including United Overseas Bank, Alliance Bank and EON Bank.
Currently, AmInvestment Bank Group has 41 unit trust funds marketed under its retail brand AmMutual and two exchange-traded funds.
Total assets under AmMutual funds management, including two exchange-traded funds and discretionary mandates, are worth RM18.4bil as at Aug 31.
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