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Daily liquidity for Clerical fund

Clerical Medical’s Secure Investment Plan, its first protected fund, will feature 110 per cent exposure to the FTSE 100 and daily liquidity.

The fund, as exclusively revealed in Money Marketing earlier this month, is effectively a structured product in an Oeic structure.

Investors can leave the fund at NAV through the daily liquidity function but the capital guarantee and 110 per cent exposure are only applicable if the product is held for the full five-and-a-half-year term. The daily price can be checked on Clerical Medical’s website.

The returns from the FTSE will be averaged over the last six months of the term to reduce volatility before maturity.

The first secure investment plan launches on March 1 but the group has approval for 20 of these funds and is aiming to roll out four or five a year.

Charges are bundled into the returns so there is no initial or annual fee. Minimum investment is 5,000 and the product can be held within an Isa or Pep tax wrapper.

Investment products marketing manager Rod MacDonald says that the group selected a five-and-a-half year term to maximise the participation levels.

He adds that participation levels and duration are correlated so although greater participation can be obtained through having a longer-term product, many potential customers may be put off by having to tie up capital for more than five-and-a-half years.

Macdonald says: “We have kept the product straightforward because clients do not tend to trust what they cannot understand and the capital protection will alleviate many people’s nervousness about investing in the market.”

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