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Derivatives

Morley, BarCap Launch Novel Structured Fund

Morley Fund Management and Barclays Capital have structured a 20-year investment fund, which they will offer to retail investors in the form of a medium-term note.

Morley Fund Management and Barclays Capital have structured a 20-year investment fund, which they will offer to retail investors in the form of a medium-term note. The underlying investment of the fund will be split between global equities and bonds and Morley will write covered calls on a substantial proportion of the equity to generate income. The product, dubbed the Global Distribution Fund, launched at the start of the month and is being sold through independent financial advisors.

The product is unusual because the MTN is referenced to a managed account, rather than an equity index as is common in U.K. retail structured products. Colin Dickie, a U.K. structured product marketer at Barclays Capital in London, said, "This is the first time [this type of structure] has been offered to retail." Tom Wills, derivatives fund manager at Morley in London, said the fund would purchase call options regularly.

Morley is the fund manager of U.K. life company Norwich Union, and Wills said it would be possible for Morley to rollout a similar deal through its internal network. Dickie added, "We will certainly look to do this again."

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