Friends First launches Protected Equity+ Fund, Series 3 combining performance with security
Friends First has launched their latest “Protected Equity+ Fund” to the market. In recent years international stock markets have seen periods of significant uncertainty, leaving many investors asking themselves whether the risk associated with stock-market investing is too great. Friends First has launched the Protected Equity+ Fund, Series 3 for those who are looking for higher potential returns, but with a limit to the amount of risk taken on.
Protected by Deutsche Bank, the fund invests in a combination of equities and cash. The equity element drives investment performance, while the cash provides the underlying security. When international equities are performing well, a higher proportion of the fund will be invested in equities. If the equity portion is showing a poor performance, the proportion of the fund invested in it would be reduced, which helps to cushion the fall. If the market fell significantly the fund could become 100% invested in cash.
Price protection ensures that the unit price of the investment will never fall by more than 15% from the highest value it ever achieved.
Simon Hoffman, Pension Sales Manager, Friends First said: “When the markets turn against you they can do so significantly and quickly. The Friends First Protected Equity+ Fund provides an option for those who are looking for higher returns than deposits but with a limit on exposure to risk.”
The asset allocation follows an established investment strategy called Constant Proportion Portfolio Insurance (CPPI) whereby the portfolio is reviewed daily. Friends First has an established track record in using this strategy on Protected Equity funds since 2005. Protected Equity+ Fund, Series 2 was launched in September 2008 and now has over €100m in assets. The growth on Protected Equity+, Series 2 has been 24.1% since its launch with the protected price now standing at 105.4% of its launch price (figures to 18th February 2011).
Key Features of Friends First Protected Equity+ Fund
- Low to medium risk involvement
- 85% of the highest price ever achieved by the fund is protected
- Up to 75% of the fund may invest in international equities providing unlimited growth
- A simple investment strategy applied to conventional assets
- Medium term investment (5-7 years) whilst still allowing investors full flexibility to enter or leave the fund
Notes:
- The Protected Equity+ Fund, Series 3 combines a Growth or Performance Asset, which is a range of International; Equities selected by F&C, with a secure Asset, which is Cash and Cash Deposits.
- The equities used by the fund are a basket of International Equities, a wide range of countries and sectors are used, typically 300 – 350 stocks in five regions.
- The fund has a management charge of 1.35% per annum. Additional product charges will also apply. It is important to note that the PE+3 Price Protection is that the Unit Price will not fall below 85% of its highest value. The Unit Price incorporates the annual fund management charge of 1.35% per annum, but not any additional product charges.
- F&C Asset Management (source: F&C, Jan 2011)
Established in 1868, F&C is a London Stock Exchange listed asset manager with €124.8bn (Sept 2010) in assets under management and offices in 11 countries. The organisation has significant and experienced resources at its disposal delivering professional and tailored solutions globally. F&C's multi-specialist model ensures that funds are run by small, focused teams of specialist investment professionals, supported by the resources of a large, successful firm. This approach embodies an entrepreneurial culture within a rigorous and disciplined approach to fund management.
