Royal Fidelity has expanded its international product offerings with the launch of TIGRS A3 (Total Index-Linked Global Returns Securities), an index-linked closed-end fund that gives Barbadian investors the opportunity to profit from the significant excess demand in the global agriculture and energy industries.
According to Royal Fidelity President, Michael Anderson, the new fund features the best of both a fixed income and equity investment. “In addition to 100% principal protection, this TIGRS, our fourth in the series Â also offers investors a minimum return of 10% over the five-year term plus a 65% participation in the expected upside in the Agribusiness and Energy Sector indices. These indices track the performance of the shares of the major companies participating in the global Agriculture and Energy sectors, where increased demand and limitations in supply are expected to drive attractive returns for investors.â€
While both food and energy prices have already increased over the last few years–leading to unsettling high grocery and gas prices–Anderson stresses that fundamental global trends are expected to continue to drive higher prices in both:
- Population growth. Projected by the UN to reach 7 billion in October, 2011, a year earlier than previous estimates.
- Droughts, floods, and other weather-related events. Will continue to put pressure on agricultural supply;
- Social upheaval, supply-chain disruption, and declining resources. Will continue to put pressure on energy supply;
- Biofuel production. Food for fuel means less for consumers and for animal feed;
- Rising incomes in developing countries. Rising incomes prompt a change in diet that favors more protein-rich foods such as beef, pork and chicken. This, in turn, increases the need for grain for feed and energy to produce the grain;
The investment weighting–60% to agriculture and 40% to energy–reflects Royal
2.Â Royal Fidelity Launches TIGRS to Capitalize on Global Food and Fuel Crisis; Principal Protected, Minimum 10% Return
Fidelity’s belief that energy demand will naturally increase with an expansion in the agriculture sector and the continued growth in the global economy, largely driven by China, India and other developing markets, says Royal Fidelity Barbados Managing Director, Charles Chambers.
“No matter what a farmer grows, enormous amounts of energy are required in the form of fertilizers, fuel for farming and processing machines, and for the transport of product to market. But the very simple underlying fact is that more people in the world will require more food and more fuel.â€
Chambers goes onto to point out that a recent article from Oxfam–a leading UK charity organization that monitors social issues globally–addressed this very issue. “Global food prices will more than double in 20 years at the same time that our capacity to increase food production is declining.â€
Companies within the indices include such heavyweights as Monsanto, Tyson Foods, Archer, Daniels, Midland, Exxon Mobil and Halliburton. Over the next five years, stock analysts that follow these companies have forecast impressive average annual earnings growth rates: Archer Daniels Midland, 10.0%; Tyson Foods, 7.3%; Halliburton, 23.8%; and Monsanto, 24.1%*.
“Like all the TIGRS funds, this one provides both protection and excellent potential investment returns,â€ Chambers says. “In addition to 100% principal protection investors will receive and a minimum return of 10% over five years, plus the chance to profit from global trends that are happening right before our eyes.
Click to download the following:
TIGRS A3 Information Brochure
TIGRS A3 Term Sheet
TIGRS A3 Pricing Supplement
The Royal Fidelity TIGRS A3 offering opens Monday, June 20 and closes Friday, July 1. Application forms, contact details and further information are available online at www.royalfidelity.com at the TIGRS link.