A blend of assets

Capital guaranteed funds have been the stalwart of the equity derivatives business for the past few years, but some houses are now overlaying these structures with an element of credit risk to boost returns for investors. Nick Sawyer reports

Capital guaranteed funds have been one of the equity derivatives success stories of the past few years. Certainly, it’s difficult to argue with the figures. In Hong Kong, capital guaranteed funds accounted for a whopping 90.76% of total net sales of the fund market in 2001, driven largely by the territory’s retail investors scrambling for guaranteed returns amid a gloomy economic outlook.

But traditional capital guaranteed funds have had to work a little harder for their money over the