Our Protected Growth fund aims to expose investors to some of the upsides of equity investment returns, while limiting the potential downsides by providing a defined level of protection. It could be a very useful part of a portfolio – particularly when the markets are volatile.
To find out more about the fund, take a look at this document:
And for more information about how the fund can be used as part of an income or growth portfolio, click on the link below:
How the fund works
The fund's assets are invested to gain exposure to a mix of equities and cash. The equities/cash ratio is determined by a formula.
The formula is calculated so that when stock markets are performing well, your clients get increased exposure to equities to take advantage of the growth potential, and reduced exposure to cash. In other words, when markets are rising, we move the fund's assets from cash to equities. Similarly, when markets are falling, we move the fund's assets back to cash.
The fund's equity exposure is achieved by investing in a FTSE 100 tracker fund, while the cash element is actively managed by AEGON Asset Management. It aims to maximise cash returns by investing a proportion of the cash holdings in less liquid, longer-term deposits. The remainder is invested in more liquid assets to help achieve the desired balance between equities and cash and maximise the fund's overall returns.
We don't guarantee these returns and please remember that the value of any investments may go down as well as up.
Although the Protected Growth fund offers protection, it isn't a guaranteed fund.
Investment approach
Barclays Bank is managing the ongoing asset allocation (split between equities and cash). It makes sure that exposure to equities is restricted to a maximum of 70% of the fund's assets, so there's a minimum cash exposure of 30%.
Barclays Bank reviews the proportions of equity and cash exposure every day to make sure the asset allocation corresponds to the formula. This means the asset allocation isn't left to the fund manager's discretion. The fund is also priced each day, so investors can get frequent valuations and pay in or withdraw funds regularly.
Ongoing protection
One of the main features of our Protected Growth fund is that it provides an ongoing defined level of protection.
The units in our Protected Growth fund are bought and sold at the current unit price, but the fund also has a protected unit price. This is 80% of the highest-ever price during the fund's lifetime.* The same protected unit price applies to all investors and is published every day as a net price after costs.
*Please note that for products with a bid and offer spread, the 80% protection applies to the bid value.
Performance
Since its launch just over three years ago, our Protected Growth fund has shown it can give investors a controlled level of exposure to UK equities plus the comfort of investment growth protection.
If your client had invested in our Protected Growth fund at launch, 80% of their original investment would have been protected straight away. On the fund’s third anniversary (7 March 2008), 99.7% of their investment would have been protected.
Please note: an investment's past performance is no guide to its future performance.
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