Novel Asset Management, an investment fund backed by the colored diamond traders Novel Collection, is preparing to launch the first in a series of rare diamond investment funds on July 1.

According to the investment and finance news portal finalalternatives.com, the Novel Diamond Fund I is a closed-end fund, which means that it is expected to return all capital to shareholders by June 30, 2013, and will incur management charges as low as 1%.

The New Diamond I fund will be open to institutional and "sophisticated" investors seeking to invest in "elite diamonds" worth over $1 million.

Fund director Alan Landau noted that Novel Collection's CIO Eliad Cohen and Managing Director Eyal Mashiah had "decades" of experience in rare diamond trading and that the company has a record of profitability.