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Old Mutual sets target of 4% plus cash

Old Mutual Asset Managers is looking to attract dissatisfied with-profits investors with a part-capital guaranteed product aiming to deliver annualised returns of cash plus 4 per cent.

Old Mutual Prosper 80 offers exposure to a portfolio of internal and external hedge funds and cash.

There is daily pricing, a capital guarantee up to 80 per cent of the investor’s highest unit price and no lock-in period. Minimum investment is 5,000 and the product is eligible for Isas and Peps.

Head of marketing Simon Wilson stresses this is not a fund of hedge funds but the product will be run on a managed account basis rather than held directly in the funds. Omam has seeded the product with 22m of its own money.

Commission is up to 5 per cent but this is taken from the investors money as the product has no initial charge. Trail of 0.5 per cent is also available.

Wilson says: “Hedge funds are often very low risk products and we aim to achieve cash plus 4 per cent returns after charges and are very confident we can do that.”

Hargreaves Lansdown head of research Mark Dampier says: “It is a difficult product to analyse. It is easy to say it will deliver cash plus 4 per cent but it depends on how well the hedge funds do.”

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