Funds Focus

Having worked within the financial services landscape for many years, The Insider provides investors with a behind the scenes view on the financial services industry
I was recently asked to look at a protected product for a friend of mine; an adviser had recommended he take out a 100% loan ($800,000) and invest in two protected products with a 7 year term in 2008. The view at the time was that since it was a protected product, his worst case scenario was that he would simply receive his money

Investors who keep a close eye on Capital Protected Products and other Structured Investments will have noticed a shift in focus towards products that have a volatility overlay. This approach has generally provided investors with a smarter way of investing, basing the investor’s exposure on a comparison in the current market risk (measured by volatility) against the long term market volatility average. ie reducing exposure to the underlying investments as risk increases and increasing exposure

Our June 2009 newsletter featured capital protected products and highlighted some of the pitfalls investors have recently encountered with Threshold Managed/CPPI structures such as Perpetual Protected Investment Series and Macquarie’s Fusion Fund range. Based on the level of enquiry we have had, I feel compelled to revisit Threshold Managed/CPPI capital protection as many of these products are now cash locked (or as good as) with no prospect of achieving a positive return. For many, switching