Building on the success of its existing Protected Profits Funds range, Zurich has launched a new Global Protected Profits fund aimed at cautious and moderately cautious investors investing for the medium to long term.
The Global Protected Profits fund is available through Sterling’s Individual Savings Account and the Sterling Investment Account. It is aimed at those investors who want exposure to assets which provide the potential to benefit from a recovery in global stock markets, but who also want a high level of protection. The new fund, like our current Protected Profits funds, is designed to ensure that the ‘protected’ price will not fall below 80% of the highest ever fund price. Each time the fund price increases to a new high, the protected price also increases. If the fund price then falls, the protected price remains unchanged.
The fund operates an ‘investment portfolio’ which is linked to a selection of equity, bond and commodity indices, such as the FTSE 100 and S&P 500. Alongside the investment portfolio is a ‘cash element’, which is linked to overnight Sterling money market interest rates. The fund will allow up to 100% exposure to the Investment Portfolio, thus allowing investors the potential to benefit from any market recovery.
The allocation within the fund between the investment portfolio and ‘cash element’ is reviewed on a daily basis. When the markets are performing well, more of the fund is invested in the investment portfolio and, conversely, when markets are not performing very well, more of the fund is switched into the cash element.
Paul Wright, Zurich’s Investment Management Director comments: “In these turbulent economic times, people are looking for investments which will provide a higher level of protection. This fund not only offers a high level of protection, but it also allows investors the potential to benefit from any market recovery across a diverse spread of asset classes.
The Global Protected Profits Fund, offers exposure to the UK, Europe, US, Japan, commodities and Emerging Markets. Whilst the geographical exposure is wide, 30% of the investment portfolio is invested in global government bonds. This means that the portfolio is not only diversified across geographical regions but also across asset classes, reducing the overall risk.”
Wright continues: “We are committed to providing customers with investment solutions in these challenging economic times. Because of our group strategy and our financial and operational discipline, Zurich is in a strong and stable position and well placed in today’s economic climate – so consumers can feel confident about investing with Zurich.”
Sterling’s mutual fund range (SIML) comprises of a Sterling Investment Savings Account and Sterling Investment Account
The geographical split of assets effectively available through the ‘investment portfolio’ are:
- 20% UK Equity
- 10% US Equity
- 10% Europe ex-UK equity
- 10% Japan equity
- 10% emerging market equity
- 10% commodities
- 10% gilts
- 10% German government debt
- 5% US treasuries
- 5% Japanese government debt
The TER of this fund will be 1.98% per annum
The cash element does not invest directly in cash. Instead it invests in financial derivatives that are linked to the overnight sterling money market interest rates. It will deliver a return equal to the Sterling Overnight Index Average (SONIA), which is a measure calculated by the wholesale Markets Brokers’ Association.