BNP Paribas targets 8% return with structured fund
BNP Paribas has gained regulatory approval to launch a Ucits compliant European structured product, aiming to generate an 8% return per annum.
The IFSL BNP Paribas Defined Return Europe Opportunity fund, slated to launch later this month, is a six year auto-call product linked to the EURO STOXX 50 index.
The fund will be managed by THEAM, a subsidiary of BNP Paribas Investment Partners.
The fund will aim to produce an 8% annual return via a coupon, seeking to benefit from investing across defensive European blue-chip companies.
BNP Paribas said the fund is a lower risk alternative to direct equity investment.
Counterparty risk will be mitigated by BNP posting collateral for the fund in the form of cash and AAA rated government bonds.
However, capital is not protected and will only be returned if the EURO STOXX 50 is greater than or equal to 50% of its initial index level.
The group said the product will allow investors to profit from the depressed valuations spread across the European continent, at a time when the EURO STOXX 50 index is trading at a 50% discount to its peak.
Minimum investment stands at £1,000, with a 0.75% annual management fee.
This article was first published on Investment Week