MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Wednesday, March 5, 2003 New Player Offers Protected Funds Black Diamond Asset Management is jumping into the principal protected fund arena with a series of four funds. Each of the funds will be linked to a separate stock index and will be guaranteed to at least equal the performance of the index over seven years, according to the firm. Broadmark Asset Management will subadvise the funds for the Fort Lauderdale-based Black Diamond. Each of the funds will be actively managed and will invest in index options, ETFs and options on ETFs, according to the firm. The real twist in the portfolio though is how Black Diamond will meet the guaranty. Rather than use an insurance wrap, the startup manager will invest three-quarters of the portfolio in zero-coupon Treasuries that will mature in seven years. Black Diamond has calculated that the principal payment at maturity will equal the value of the guaranty. It will then hand the remainder of the funds over to Broadmark to invest in order to provide a return over the index. Without a track record or a proven distribution channel, Black Diamond may find it has its work cut out for it. For one, affluent investors and advisors who learn of the fund would theoretically be able to adopt a similar investment strategy without purchasing the fund. The fund also lacks a brand name with customers at this point. The distributor is ALPS Distributors. The offering period for the fund started on February 20 and will end on May 23. Printed from: MFWire.com/story.asp?s=4681 Copyright 2003, InvestmentWires, Inc. All Rights Reserved |