Tower Launches 2 New Innovative Funds

Thursday, 13 April 2006, 5:15 pm
Press Release: Tower

April 13, 2006

Tower Launches 2 New Innovative Funds

TOWER has launched two innovative managed fund products into the New Zealand market, the TOWER Extended Markets Fund and the TOWER Global Commodity Fund.

“TOWER has taken the initiative in bringing out two new options in the higher risk/return category of managed fund investments that have been highly successful in overseas markets,” TOWER Investments Chief Executive Officer Tony Hildyard announced today.

“The TOWER Global Commodity Fund is the first New Zealand-domiciled commodity fund of its type to be launched to the general public here and expands the range of alternative assets available in this country.”

“The TOWER Extended Markets Fund introduces both emerging market and US high yield corporate bonds combined together as a package that can complement traditional fixed interest investments.”

“TOWER’s leadership in the managed funds field is reaffirmed by this product launch”

“These two funds are highly original within the context of the New Zealand investment markets,” he said, “and serve to reaffirm TOWER’s close relationship with PIMCO, the underlying manager”

The TOWER Extended Markets Fund is an international fixed income fund that specialises in emerging market and corporate high yield bonds. The benchmark is a combination of 55% JP Morgan Emerging Markets Global Bond Index and 45% Merrill Lynch US High Yield BB/B Index, both 100% hedged into the New Zealand dollar. The fund represents a higher risk/return profile than traditional international fixed income funds.

The TOWER Global Commodity Fund is a collateralised commodity fund that tracks its benchmark, the Dow Jones-AIG Commodity Index Total Return Index. The index represents the collateralised return of an annually rebalanced basket of long-only futures contracts on 19 commodities in six industrial categories: energy, industrial metals, precious metals, livestock, grains and food/fibre. Commodities are selected for index representation based on their futures market liquidity and US dollar-denominated global physical production.

PIMCO (Pacific Investment Management Company), the underlying manger of both funds, is the world’s largest bond manager and the largest manager of collateralised commodities. Presently it manages NZ$1.2 billion in global aggregate bonds on behalf of TOWER.

The two new funds are the initial offerings in the TOWER Mezzanine Investment Series, which is specifically aimed at distribution through the New Zealand wrap platform market. The TOWER Extended Markets Fund is designed to supplement fixed income allocations, while the TOWER Global Commodity Fund is intended to augment allocations to alternative investments. Both funds are New Zealand-domiciled, fully hedged to the New Zealand dollar, and feature daily unit pricing.

ENDS

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