Current Capital protected offers
Capital Protection - Which product?
There are a large number of products that have just been launched to satisfy investor’s insatiable appetite for capital protection. For most investors the choice of which protection route to opt for is really a question of what you want to invest into. If you want to invest in managed funds you are typically going to end up in a CPPI type structure, whilst Bond + Call structures are generally linked to the performance of an index. Our current view is that the high volatility in the markets is currently disadvantaging CPPI type structures. Since they inevitably sell down with a fall in the market and buy back in at a higher point, investors in a rising fund may find themselves not participating fully in gains of the underlying investment and we would suggest investors avoid the more volatile investment choices offered.
PPI Series 4 (2.2% rebate)
Structure: CPPI
Investment Term: 7 years
Expected Close Date: Product Withdrawn
Fund Choice: 11 funds
Minimum Investment: $25k ($50k with investment loan)
100% Inv. loan available: Yes (also up to 55% for SMSFs)
Pros: Choice of 11 managed funds. Since the CPPI can entirely cash out, the trigger points should technically be lower than Fusion, allowing a higher level of participation in equities.
Cons: CPPI structure typically means less than 100% participation. 100% moved to cash = no equity participation for the remainder of the term
Disclosure:
Wealth Focus will rebate 100% of the 2.2% sales commission. Wealth Focus will receive a trailing commission of 0.65%p.a.
Documents & Links:
Prospectus/PDS link
PPI Series 4 Factsheet
PPI Series webpage
Contact Wealth Focus on 1300 55 98 69 for more information.
Macquarie Fusion Funds (1.0% rebate)
Structure: CPPI
Investment Term: 5 years
Expected Close Date: 28/11/08
Fund Choice: 16 funds
Minimum Investment: No minimum ($50k with investment loan)
100% Inv. loan available: Yes (not available for SMSFs)
Pros: Choice of 16 managed funds. Shorter investment term than PPI Series 4. Never cashes out entirely, always has some equity participation.
Cons: CPPI structure typically means less than 100% participation. Once CPPI moves to a high cash holding, underlying fund may need to rise as much as 200-300% to get 100% in equities again.
Disclosure:
Wealth Focus will rebate 100% of the 1.1% sales commission. Wealth Focus will receive a trailing commission of 0.50%p.a.
Documents & Links:
Prospectus/PDS link
Fusion Funds Factsheet
Fusion Funds webpage
Contact Wealth Focus on 1300 55 98 69 for more information.
Man OM-IP 220 2008 (4% rebate)
Structure: Bond + Call
Investment Term: 10 years
Expected Close Date: 28/11/08
Fund Choice: 1 fund
Minimum Investment: $5,000
100% Inv. loan available: No
Pros: Bond + Call never disinvests from equities. The AHL diversified fund which is the primary contributor to returns in Man OM-IP products has an excellent track record and has successfully provided investors with absolute returns.
Cons: 1. No fund choice. 2. The AHL program looks to take advantage of trends based on historical movements in global markets. We wonder whether the recent increase in volatility will impact on the returns in the short term.
Disclosure:
Wealth Focus will rebate 100% of the 4% sales commission. Wealth Focus will receive a trailing commission of 0.5%p.a. after the second year of the investment
Documents & Links:
Prospectus/PDS link
Man OM-IP 220 2008 Factsheet
Man OM-IP offers webpage
Contact Wealth Focus on 1300 55 98 69 for more information.
Performance of the AHL Diversified Program vs Australian and global stock markets (December 1990 to October 2008^)
Capital Series Australia (up to 2% rebate)
Structure: Bond + Call
Investment Term: 5.5 years
Expected Close Date: 05/12/08
Fund Choice: 1 fund (ASX 200 Index)
Minimum Investment: $10k
100% Inv. loan available: Yes (not available for SMSFs)
Pros: Bond + Call never disinvests from equities. Bond secured in-house with Commonwealth should = lower cost = higher participation in equities. Short investment term.
Cons: No active management, returns over the guarantee are based entirely on the rise of the ASX 200.
Disclosure:
Wealth Focus will rebate 100% of the 2% sales commission, 1% if no loan is applied for. Wealth Focus will receive a trailing commission of 0.50%p.a.
Documents & Links:
PDS part 1 link
Application/PDS part 2 link
Capital Series Australia Factsheet (English)
Capital Series Australia Factsheet (Chinese)
Capital Series Australia webpage
Contact Wealth Focus on 1300 55 98 69 for more information.
The historical performance of the All Ordinaries Index since 1983 and the S&P/ASX 200 Index since 1992
Axa North (4% rebate)
Structure: Dynamic Hedging
Investment Term: Protected Inv. Guarantee (5 or 7 yrs),
Protected Growth Guarantee (10,15, 20 yrs)
Expected Close Date: Ongoing offer
Fund Choice: 49 funds
Minimum Investment: $20k
100% Inv. loan available: Not currently (expected to launch soon)
Pros: The only retail product currently offering dynamic hedging allowing investors to bolt on protection when they want it and remove it when they don't. Product actually offers 2 different protection strategies with a choice of protection terms (5-20 yrs).
Cons: Vast variety of options and a new product could be confusing for investors. Explicit charges can also make this look expensive.
Disclosure:
Nil entry fee. Wealth Focus will rebate the 4% sales commission. Wealth Focus will receive a trailing commission of 0.50%p.a.
Documents & Links:
PDS link
Axa North Factsheet
Axa North webpage
Contact Wealth Focus on 1300 55 98 69 for more information.
Contact Details P: 1300 55 98 69 | F: 1300 55 98 70
Office: 56 The Corso, Manly NSW 2095 | Postal Address: PO Box 760, Manly, NSW 1655
Wealth Focus Pty Ltd ABN: 87 123 556 730 ( AFSL No: 314 872 )
2008 Wealth Focus Pty. Ltd. All rights reserved.