Den of The Lion Investor

I saw from last week’s copy of The Edge that they were increasing their cover price. After six years, their price will be increased from $3 to $3.80. This works out to be a 26.7% increase (or about 4% annualised).

Existing subscribers can renew at 50% off the old rate if they inform the edge of their intention before 9th Aug 2008. Just send an email to hotlinespore@bizedge.com with your subscription information and the word Renew in the subject header.

Lion Global has recently launched a new fund, the Lion Global AUD Short Duration Fund. This fund invests in high quality short-term AUD money market instruments and debt securities and aims to provide a return which is comparable to that or better than AUD deposit rates.

As we all know, the interest rates in Australia are at 12-year high and a large sum fixed deposit can easily get a yield in excess of 7% or sometimes even 8%.

The Lion Global AUD Short Duration Fund aims to generate excess returns by active management of the yield curve/duration, credit and currencies.

Risk Factors

• Since the duration of the holdings are 5 years and below (mainly 3 years), the risk from rising interest rates will be slightly reduced.
• There will be currency risk from a weakening Australian dollar and pullback in commodity prices.
• Credit risk of corporate bonds.

The Lion Global AUD Short Duration Fund seems to be one of the first few money market/bond funds with a focus on Australia available to retail investors here.

This fund is a good proxy to a direct fixed deposit investment. With the pooling of funds, you are likely to get a better interest rate than if you were to invest in a fixed deposit directly. Investing via this fund also comes with the advantage of no locked-in period and daily liquidity.

A minimum of just A$5000 is needed to invest in this fund. The fund has a maximum sales charge of 0.2%. There is a redemption charge of 0.1%. The annual management fee of this fund is 0.5%.