Australian investment manager JB Global is set to launch a new capital protected fund tied to the United States housing market.
The JB Global US Real Estate Investment offers investors exposure to a sector that was at the epicentre of the global financial crisis, but without the risks associated with direct investment, according to JB Global chief executive Justin Beeton.
Its release follows JB Global's launch of the Berkshire Hathaway Income & Equity Accelerator, which raised $58 million in March.
"US property is the next place Australian investors should look for growth," he said.
"The old adage of investing when there's blood in the streets is definitely true of US property. US property prices are still priced at a 60 per cent discount to 2007 levels."
Market sentiment in the US is a lot higher than it was six to 12 months ago, while the economy seems to have bottomed and property prices seem to have stabilised, Beeton said.
"I can see a return to equilibrium between US property buyers and sellers, which to me indicates a recovery in property prices is likely," he said.
The fund invests in the Dow Jones US Real Estate Index, which is 60 per cent below its 2007 highs.
The product is designed to protect investors from declines in US property values and currency by using a combination of capital protection and risk management mechanisms.
Investors must borrow 100 per cent of the investment amount and pay interest upfront at 3.4 per cent. The loan, provided by the Royal Bank of Scotland, is non-recourse, meaning it doesn't have to be paid back if the lender collapses.
"This makes the investment suitable for SMSFs (self-managed superannuation funds), which are only allowed by law to invest in non-recourse leveraged products," Beeton said.
Redemptions in the fund are available quarterly and contingent coupons of up to 8.1 per cent are payable based on performance.
The JB Global US Real Estate Investment opens from tomorrow and closes on 25 June.
