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Nu protector fund offering 80% share price guarantee

Norwich Union is offering a protected fund investing in UK equities and gilts which guarantees that the share price will never fall below 80 per cent of its peak level.

The Norwich active protector fund, launching on March 1, will invest in an actively managed portfolio of six underlying NU funds and a basket of short-dated cash instruments.

The latter holdings will be used to lock in gains and provide the protection.

Using a continuous port-folio protection insurancestyle model, the fund, split between equities, bonds and cash, will change depending on market movements so exposure to the market is reduced to protect returns.

The underlying funds will be NU’s equity income, UK growth, UK index tracker, UK smaller companies, managed high-income and cor-porate bond mandates. At launch, the active portfolio will be 60-40 split in favour of equities over bonds.

The annual management charge depends on the fund’s holdings. The standard charge is 1 per cent but this will fall to 0.75 per cent if 50 per cent or more of the fund is invested in the protected component. The initial levy is 5 per cent. Minimum investment is 500 or 50 a month.

Head of investment Neil Davies says: “This fund could be ideal for cautious investors who want an investment that is partly linked to equities but who are looking for some deg-ree of protection.”


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