View more on these topics

NU actively protects growth

The Norwich Union active protector fund is an Oeic fund of funds which uses constant proportion portfolio insurance to lock in 80 per cent of the highest share price.

According to Norwich Union, the traditional solution for investors who want equity returns with low volatility has been with-profits funds. But bas press and the necessity of lower bonus rates as a result of poor stockmarket performance has made with-profits less attractive to many investors.

Although Norwich Union believes with-profits have a part to play and is still active in this market, it is offering the active protector fund as an alternative to with-profits.

The fund is divided into two components. The active part of the fund invests in a portfolio of six Norwich Union funds – UK equity income, UK growth, UK index tracking, UK smaller companies, managed high income and corporate bond funds while the protected part invests in short-term cash deposits.

At launch the fund will invest 100 per cent in the active component but when the share price falls. Initially the active component will be made up of 60 per cnet equities and 40 per cent fixed interest.

When the funds share price is high, the active component will have the greater weighting, but this will be reduce din favour of cash deposits when markets fall. The protected price is backed by UBS through a derivatives-based contract and this makes it possible to protect 80 per cent of the funds highest share price.

Although this fund is innovative in its broader use of derivatives as permitted by Ucits III and its application of CPPI to a basket of actively managed funds, a potential drawback is that investors are tied to Norwich Union funds with no opportunity to access external fund managers.


Zurich applies CPPI to active fund range

Zurich says it anticipates little competition for its multi-manager protected profits fund because other companies using constant proportion protection insurance are focusing on passively managed UK funds.

Farrow’s view

Apparently, there is growing concern among IFAs that a constant drip of negative coverage of poorly-performing funds such as BestInvest’s Spot the Dog report, deters consumers from investing. I doubt that it does.

Credit Suisse predicts continued mid cap growth

Credit Suisse Asset Management believes that mid cap growth stocks are particularly attractive. Credit Suisses mid cap 250 fund, launched in November 2003, returned 21.9 per cent over the last year, compared to a 12.8 per cent growth in the FTSE all-share over the same period.

Payout earmarked for Eurolife investors

Investors in the Eurolife Secured Bond have been asked to vote on a partial repayment after the bond defaulted.About 2300 investors should have been repaid abpout 17m of capital on January 23. After three weeks of negotiations they are now being asked to vote on the chance to back a minimum 60 per cent of […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment