Public Bank launches PB Templeton BRIC

Public Bank launches PB Templeton BRIC
Written by Edge
Tuesday, 08 September 2009 14:02


KUALA LUMPUR: Public Bank Bhd has launched a structured investment product, PB Templeton BRIC, offering investors the opportunity to capitalise on the growth potential of the Brazil, Russia, India and China (BRIC) economies.

“PB Templeton BRIC provides an annual variable coupon of up to 3% (subject to the US$/RM movement) for the first three years of the investment and at maturity, the potential is unlimited enhanced return based on the average performance of the underlying asset performing above 110%,” said Public Bank managing director Tan Sri Tay Ah Lek in a statement yesterday. He said the investment would provide its customers with immediate access to invest in equities in countries like Brazil, Russia, India and China.

Tay said according to the International Monetary Fund, the BRIC countries were four of the fastest-growing economies in the world, accounting collectively for about 30% of the world’s gross domestic product (GDP).

He said their outlook remained positive due to their relatively strong fundamental characteristics and faster growth compared to their developed counterparts, and the accumulation of foreign exchange reserves also put the BRIC countries in a much stronger position to weather external shocks.

Tay said despite the global economic slowdown, the Chinese and Indian markets continued to record exceptionally robust growth rates, while Brazil and Russia were likely to benefit from increasing global demand for commodities.

“This Investment is suitable for investors who are seeking potentially higher returns compared to the current fixed-deposit rates without taking undue risk on their wealth if the Investment is held to maturity, and for those seeking to diversify their investment portfolio into emerging markets,” said Tay.

Templeton BRIC is managed by Franklin Templeton Investments, which is one of the world’s largest investment-management companies.

Templeton is one of the pioneers in emerging markets investing, having been the first to set up a dedicated emerging markets equity team in 1987 under the leadership of Dr Mark Mobius, who is the lead manager of the Templeton BRIC Fund. Public Bank said this investment was for a three-year, nine-month period via floating rate negotiable instruments of deposit (FRNID) and was 100% capital-protected in ringgit terms if held to maturity. The product is available from yesterday to Oct 2, 2009. The minimum investment is RM65,000, with multiples of RM5,000 thereafter.

http://www.theedgemalaysia.com/personal-finance/148892-public-bank-launches-pb-templeton-bric-.html

Comment:  Capital-protected in ringgit terms if held to maturity.  These capital protected or guaranteed funds are unlikely to give exceptionall return.  A large part of the fund will be invested in "safe" investments to ensure the safety of capital and only a small proportion of the fund is invested in "more risky" investments for "higher returns."