SG launches another capital guaranteed fund in Hong Kong

SG, a division of French banking group Société Générale, has launched another capital guaranteed fund into the Hong Kong retail market, this time linked to stock market volatility.

Called Swing, the new four-and-a-half year fund pays out an annual coupon based on the smallest absolute variation – whether up or down - within a basket of 18 global blue-chip stocks, aimed at taking advantage of recent stock market volatility.

“Volatility in the equity markets is increasing, due to confusing signs from the economy and lower confidence from investors following accounting scandals,” commented Nicolas Reille, senior vice-president, structured products, Asia ex-Japan at SG in Hong Kong. “Therefore we have been working on designing a structure that allows investors to benefit from this volatility.”

The fund offers two capital guarantee alternatives. One with a 100% capital guarantee and an estimated participation rate of 90%, the other with a 2% guaranteed coupon and a participation rate estimated at 45%. The fund’s introduction in Hong Kong follows its launch in Singapore three months ago, distributed through DBS Asset Management.