Here's a Money Week question: how do you connect a guaranteed fund to a Japanese adult video actress wearing a bikini? Answer: go to the nearest newspaper stand and seek out this week's Next Magazine - Hong Kong's highest-circulation weekly. While the Jimmy Lai-controlled publication has been notorious - I mean renowned - for its in-your-face tabloid style, we can be quite certain that the marketing people at Macquarie Equities had no idea what would be juxtaposing their latest product's debut advertisement. To demonstrate its determination to tap the guaranteed-fund market, the company ran a sash advert around this week's issue of Next. While putting a wrap-around on regional editions of publications such as Time and the Economist is common practice among multinational firms, trying it out on a local publication has been rare. Macquarie just happened to choose the week Next's cover story involved, as the headline says, 'Live from Japan and Hong Kong, one-stop services for adult videos'. In true Next fashion, it featured a scantily clad adult video actress licking a lollipop in a seductive pose, in a shot from one of her movies. The next day we tracked down Macquarie's associate director of equity derivatives sales, Moses Liu, who did not seem overly bothered by the juxtaposition. 'We had no idea what cover story was going to be there when we put in the order,' Mr Liu said. 'The issue is already out now and there is nothing we can do about it. But we don't think this is going to be too big a problem.' No problem at all, Mr Liu. And as one of our colleagues, who picked up a copy himself, said: 'They should look at the brighter side - at least they've got all the men's attention.' redemption awaits buyers As reported in Money Week, there have been many suggestions about how the recovering stock market would dampen interest in guaranteed products, once the darling of ultra-conservative investors who had become fed up with the paltry interest fixed deposits offered. But judging from what we've seen lately, fund houses are apparently having second thoughts. Other than Macquarie, a relative novice to the local retail guaranteed product market, SG and Calyon have also launched structured notes offering at least some form of guaranteed returns. The Macquarie notes, which are linked to some of the biggest blue chips and China-related stocks, include a maximum 10 per cent potential return per year within its five-year term on top of a guaranteed 5 per cent coupon after the first 12 months. The note's structure is quite simple - at least to those who understand the basic mechanism of stock price movements. Starting at 10 per cent, whenever the price of a stock in the portfolio drops below 75 per cent of the price on its fixing-day, you lose 2 per cent off the maximum annual return in the current and every subsequent year. When a second stock goes under, you lose a further 2 per cent and so on. In other words, if five stocks experience an Enron-like fall in the first year, you face the danger of having your money tied up for five years earning nothing besides the 5 per cent guaranteed coupon in the first year. On the other hand, automatic redemption will be triggered if, on any one of the semi-annual valuation days after the first year, the average price of the portfolio's five worst-performing stocks stays above 90 per cent of their average fixing price. Hence, according to Mr Lui, the note will likely be more appealing to investors if there is a 'major adjustment' in the market within its offer period, which began on Tuesday and runs until November 10, since there will be more upward expectations. keeping it simple The SG and Calyon notes more simple offer structures. For SG, after a guaranteed 10 per cent coupon at the end of the sixth months, there will be semi-annual coupons with variable returns until the end of the second year when the notes mature. The potential returns will be tied to the performance of six Hong Kong-listed shares, compared to the more than 30 stocks in Macquarie's notes. Again, there will be chances of early redemption after the first year. But if the prospect of having your money locked up for two years is still too grave, try Calyon's. The aptly named 'Speedy Turbo' 1?-year equity-linked notes - like their SG counterparts - are also linked to six Hong Kong-listed blue chips with a fixed coupon of 11 per cent after the first sixth months. While it might be redeemed after six months, the maximum potential return of 15 per cent is considerably less than the 38 per cent suggested by SG.