H3XS Newstar Rbc 3X�

RNS Number:9606W
New Star RBC Hedge250 IDX (3X GBP)
21 May 2007

21 May 2007
    



                                   HEDGE ETS

  (A closed-ended investment company incorporated in Guernsey with registered
 number 45501 under the provisions of The Companies (Guernsey) Law 1994 to 1996
      and the Protected Cell Companies Ordinance 1997 to 1998, as amended)



             Third Placing and Offer for Subscription of new shares



The Board of New Star RBC Hedge 250 Index Exchange Traded Securities PCC Limited
("Hedge ETS") is pleased to announce it is to make a third offering of Hedge
ETS, a London listed daily tradable security, providing access to performance
representative of the hedge fund asset class through investment exposure to the
RBC Hedge 250 Index(R)- (the "Index").



The Index is designed to be a representative, investable benchmark of the
performance of the hedge fund asset class.  The Index has the following key
features:



*          extensive diversification across over 250 hedge funds and nine
distinct strategies;

*          asset-weighted by strategy, approximately equally-weighted initially
by hedge fund;

*          rules-based construction methodology designed to emphasise
inclusiveness and minimise selection bias;

*          inclusive selection criteria which results in hedge funds which may
have lock-ups, redemption gates, low liquidity and which are presently closed to
investment;

*          total assets under management of the hedge funds in the Index were
US$230 billion (30 April 2007, source: RBC Capital Markets).



Performance of the Index



Since its inception on 1 July 2005 to 30 March 2007, the Index has closely
tracked returns on hedge funds and outperformed other recognised investable
hedge fund indices.


                                            Annualised return               Volatility
RBC Hedge 250 Index(R)1                                                          3.6 %
                                                        11.3%
Average Non-Investable Index2                                                    3.9 %
                                                        13.0%
Average Investable Index3                                                        3.0 %
                                                         8.5%



1 Returns are net of monthly Index fee of 1/12 of 0.95 per cent. of the
beginning of month Index level. US$ returns from 1 July 2005 to 30 March 2007,
data sourced on 14 May 2007.  Source: Index returns - RBC Capital Markets,
calculations - Mellon Analytical Services.

2 Average Non-Investable Index does not include any index fees and is an equal
weighting of the HFRI Fund Weighted Composite Index, MSCI Hedge Fund Index and
Credit Suisse/Tremont Hedge Fund Index. US$ returns from 1 July 2005 to 30 March
2007, data sourced on 14 May 2007. Source: Index returns - Bloomberg,
calculations - Mellon Analytical Services.

3 Average Investable Index is net of estimated index fees and is an equal
weighting of the HFRX Global Hedge Fund Index, MSCI Hedge Invest Index and
Credit Suisse/Tremont Investable Hedge Fund Index. US$ returns from 1 July 2005
to 30 March 2007, data sourced on 14 May 2007. Source: Index returns -
Bloomberg, calculations - Mellon Analytical Services.




Hedge ETS



Hedge ETS, launched at the end of November 2006 has raised US$255 million in two
placings and two smaller "tap" issues. Hedge ETS is a unique security offering
daily liquidity, and in 1X (unlevered) shares and 3X exposed shares.  As at 18
May 2007 the mid-market price of the US dollar 1X and 3X shares were 8 per cent.
and 13 per cent. above their original issue price respectively.



Hedge ETS obtains exposure to the Index through swap contracts with Royal Bank
of Canada and is subject to a management fee.



New shares are being issued under a global placing (outside the US) and a public
offer in the UK. UBS Investment Bank is acting as sponsor to Hedge ETS. Royal
Bank of Canada Investment Management (UK) Ltd and UBS Investment Bank are acting
as placing agents.



Two types of shares are being offered: 1X shares which offer unleveraged
exposure to the performance of the Index and 3X shares which target three times
exposure to the performance of the Index.  Under the placing, both are available
in Euro, Sterling and US Dollars, with a minimum investment per placee of
EUREuro50,000, GB#40,000 and US$75,000 respectively.



In order to assist in the management of any discount to net asset value, up to
14.99 per cent. of the shares in issue may be purchased in the market.  In
addition, each shareholder will have the opportunity to redeem up to 100 per
cent. of their shares at close to net asset value on the first business day of
January or July in each year, subject to providing at least 120 days prior
notice and the Hedge ETS directors exercising their discretion to offer
redemptions.



Expected timetable


Prospectus published                                                                 on or around 24 May 2007
Estimated Index level to determine issue price                         as at 5.00 pm. UK time on 21 June 2007
Placing closes                                                                                   22 June 2007
Issue price announced                                                                            25 June 2007
New shares commence trading                                                                      28 June 2007



Issue price



Shares will be issued under the Placing and Offer at a price per Share which is
at a premium to the "Issue Net Asset Value per Share" of the relevant Class.
The Issue Net Asset Value per Share will be determined as at the 21 June 2007 by
reference to the estimated Index level prevailing at the close of business on
that date as published by RBC, adjusted for (i) the average of any position
intra-month moves in indices comparable to the Index and (ii) the expenses of
the Issue.



In the case of the 1X Shares, the Issue Price will be equal to 101.25 per cent.
of the Issue Net Asset Value per Share of the relevant Class.  In the case of
the 3X Shares, the Issue Price will be equal to 103.4 per cent. of the Issue Net
Asset Value per Share of the relevant Class.



The Issue Price will represent a premium of 1.25 per cent. in respect of the 1X
Shares and 3.4 per cent. in respect of the 3X Shares (being three times the
premium applicable to 1X Shares, but adjusted for funding costs) to the then
prevailing estimated Net Asset Value per Share of the relevant Class with a view
to ensuring, so far as reasonably possible, that there is an enhancement to the
subsequently published Net Asset Value per Share as at 30 June 2007 (the "30
June NAV per Share") for the holdings of existing Shareholders.  However, where
the difference between the estimated Index level as at the Calculation Date and
the actual Index level used to determine the 30 June NAV per Share exceeds the
Issue Net Asset Value per Share by more than approximately 1.25 per cent. the
subsequently published 30 June NAV per Share for the holdings of exiting
Shareholders will be diluted.



The effect of any positive or negative effect arising from the Issue on the
subsequently published 30 June NAV per Share will be allocated pro-rata to the
total Net Asset Value of each Cell as enlarged by the Issue.



Enquiries:



Ravi Anand, New Star Asset Management        020 7225 9292





Important Information

Hedge ETS is the brand name for shares issued by the 1X and 3X cells of New Star
RBC Hedge 250 Index Exchange Traded Securities PCC Limited, a Guernsey based
investment company which enters into swaps with Royal Bank of Canada to provide
exposure to the Index.

This announcement and the information contained herein is not for publication,
distribution or release in, or into, directly or indirectly, the United States,
Canada, Australia or Japan or to US persons.  The information contained herein
does not constitute an offer of securities for sale including in the United
States, Australia, Canada or Japan.

This announcement is not a prospectus.  Investors should only acquire securities
on the basis of information contained in the prospectus relating to such
securities as and when published.  In the event of any discrepancy between this
announcement and the prospectus, the prospectus will prevail.  Details of where
copies of the prospectus can be obtained will be announced in due course.



The information contained in this announcement is for background purposes only
and does not purport to be full or complete.  No reliance may be placed for any
purpose on the information contained in this announcement or its accuracy or
completeness.  No representation, warranty or undertaking, express or implied,
is given as to the accuracy or completeness of the information contained in this
announcement by New Star or its directors and no liability is accepted by such
persons for the accuracy or completeness of any such information.

This announcement does not constitute or form part of any offer to issue or
sell, or any solicitation of any offer to subscribe or purchase, any
investments, nor shall it (or the fact of its distribution) form the basis of,
or be relied on in connection with, any contract thereof.

The information about Hedge ETS set out above is included in this announcement
for information purposes only and is not intended to constitute an invitation or
inducement to invest in the fund.  To the extent that such information is deemed
to constitute such an invitation or inducement, it is made solely to and/or is
directed solely at persons who are both (a) intermediate customers or market
counterparties for the purposes of the FSA's Conduct of Business Sourcebook and
(b) of a kind to or at whom such information may lawfully be issued or, as the
case may be, directed under The Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 ("permitted persons").  Persons other than
permitted persons should not rely on the information relating to Hedge ETS
contained in this announcement.

Acquiring investments to which this announcement relates may expose an investor
to a significant risk of losing all of the amount invested.  Persons considering
investing in such investments should consult an authorised person specialising
in advising on such investments. Daily liquidity is not guaranteed.



UBS Investment Bank is acting, solely as sponsor and placing agent, for Hedge
ETS exclusively and no one else in connection with the global offering. UBS
Investment Bank will not be responsible to anyone other than Hedge ETS for
providing protections afforded to clients of UBS Investment Bank or for
providing advice in connection with the global offering, the contents of these
materials or any matter referred to herein.



Royal Bank of Canada Investment Management (UK) Ltd is acting solely as placing
agent for Hedge ETS. Royal Bank of Canada (together with its affiliates, "RBC")
may also act as product provider to New Star and/or Hedge ETS. RBC (i) has not
prepared, and makes no express or implied warranties concerning, the accuracy or
completeness of these materials; and (ii) expressly disclaims any advisory,
fiduciary or similar relationship with any recipient, and any liability
whatsoever for any direct or consequential loss arising from any use of the
information contained herein.



(R)Registered trademark of Royal Bank of Canada, RBC Capital Markets is a
trademark of Royal Bank of Canada.  Used under license.



UNITED STATES

The information contained herein is not for publication or distribution to
persons in the United States of America. The securities referenced in this
document have not been and will not be registered under the Securities Act of
1933 (the "1933 Act"). Such securities may not be sold or transferred to United
States persons unless such sale or transfer is registered under the 1933 Act or
exempt from such registration.






                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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