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CitiFirst extends closing date of autocall fund


CitiFirst, the retail structured products division of Citi, is extending the closing date of its UK Autocall Fund to the end of the current tax year.

The extension coincides with a drive by CitiFirst to target discretionary and high net worth IFAs.
Prior to the launch of the fund in January 2010 IFAs operating in the high net worth sector had limited access to structured funds.
“With the emergence of our fund, there is now a product to meet the demands of a significant group of investors looking for an open-ended fund offering potentially attractive yields in slow or benign market conditions,” says Emma Davidson, director, head of UK retail structured product sales at Citi. “The fund is timely considering recent regulatory guidelines regarding best practice for managing counterparty exposure.”
Recent guidance relating to counterparty diversification of client portfolios has suggested that a ten per cent portfolio threshold be used on a client’s exposure to a single unsecured issuer of structured products. As the UK Autocall Fund aims to fully collateralise itself using G7 government debt, single counterparty exposure within the structure is eliminated.
“Advisers who in the past shied away from bank-issued structured products due to counterparty risk should take a long look at structured funds,” says Davidson. "It is still up to us and the advisers to educate clients on counterparty risk, however, we have provided advisers with an investment option that addresses this long-debated concern.”
The fund is designed to deliver potentially attractive returns determined pursuant to a predefined strategy to investors over five year investment cycles or shorter if autocalled. Returns of 9.25 per cent p.a. are achievable while benefiting from a level of conditional capital protection. In addition, the fund’s assets are fully collateralised by G7 sovereign debt.

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