With the aim of offering Mauritians the opportunity to invest in forward-looking sectors, Mauritius Commercial Bank (MCB) Capital Markets launched this Friday, October 17, 2014, a five-year capital guaranteed investment called Crescendo Megatrends.
Crescendo Megatrends is designed to allow investors to benefit from global megatrends, where the guaranteed capital investment product has as its objective the optimization of returns on investment while timing the market right.
Crescendo Megatrends is a five-year capital guaranteed investment issued by MCB Structured Solutions Ltd and guaranteed by The Mauritius Commercial Bank Ltd.
By investing in Crescendo Megatrends, investors will thus be able to invest in companies which have already attained maturity, and their investment will be spread across six different funds.
An important feature of this product is that 100% of the initial investment is guaranteed at maturity by the MCB; though an investor can choose to have a minimum guaranteed return at maturity or a greater participation in the performance of the Reference Index.
Most importantly, investors will not participate in the negative performance of the Reference Index, i.e., if the performance of the Reference Index is – 25%, your participation will be floored at 0%. However, there is no ceiling as to the upside potential, i.e., if the Reference Index performs 250%, you benefit up to 130% of the 250% performance depending on your choice.
Three different investment categories are proposed, depending on performance participation, currency type and guaranteed return criteria, namely Megatrends MUR50, Megatrends MUR130 and Megatrends USD50 with investment either in Mauritian Rupees (for the first two) or in US Dollar (for the third), and a minimum investment value of Rs 150,000 or USD 5,000 respectively.
Thereafter, the MCB expects to provide its investors with an investment guaranteed return, which varies between 12.5% upon maturity, guaranteed for the Megatrends MUR50, while 130% participation in performance is expected from the Megatrends MUR130.
One of the features of Crescendo Megatrends is that is based on the Global Financial Stress Index (GFSI) developed by the Bank of America Merrill Lynch Research, to protect investors against risks of volatility related to the stock markets.
BofA Merrill Lynch Research created the GFSI as a comprehensive measure of financial stress incorporating 23 components across 5 asset classes. The GFSI captures three kinds of market stress namely risk, hedging demand and investment risk appetite (markets are assumed to be more stressed when risk and hedging demand increases and when investment risk appetite decreases).
Hence, the GFSI can be used as an early-warning indicator for risky assets by applying a market timing rule for interpreting changes therein.
In the near future, MCB expects its Crescendo Megatrends product to increasingly impact every walk of life from the economy, business, culture to personal life, and all this at a global level.
Megatrends are global, sustained and macro-economic forces of development that impact businesses, economies, societies, cultures and personal lives thereby defining our future world and its increasing pace of change. For instance, we know that wealth will probably continue to increase globally, that there will be more elderly people, increased pressure on the environment and demand for increasingly scarce resources.
Identifying these foreseeable global trends and the businesses in market sectors that are positioned to benefit from these “Megatrends” can help investors take advantage of the growth prospects of these companies over the coming years.
Crescendo Megatrends is designed to take advantage of these developments, most of which have started taking shape since some years ago and which are expected to last for more years to come, by investing in a basket of funds providing access to successful companies involved in these different sectors.
To invest in Crescendo Megatrends interested investors may visit any MCB outlet before November 28, 2014.
Image (MCB Capital Markets): An important feature of this product is that 100% of the initial investment is guaranteed at maturity by the MCB; though an investor can choose to have a minimum guaranteed return at maturity or a greater participation in the performance of the Reference Index.
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