We will all have clients who are not yet brave
enough to invest in today's turbulent investment climate despite the historical outperformance from equities over the longer term.
If the current prolonged bear market has made you doubt whether this is still true, take a look at the Autif quarterly chartpack for October. I can't say I'm a fan of investment products investing over a specific period because stockmarkets simply do not work to a pre-determined timescale but JP Morgan Fleming has gone some way to addressing this with its capital protection global growth fund.
The capital is 100 per cent protected over the five-year term,with the initial starting and finishing levels averaged out over one-year periods to help eliminate the risk of poor stockmarket timing both into and out of the product.
A further criticism I have of some “guaranteed” products is where the investment return is linked to a specified, pre-selected basket of stocks none of the constituents of which can be deselected if the fortunes of the company deteriorates.
JPMF has avoided this potential pitfall as clients' investments are spread across some of the best funds from the JPMF stable, including the highly regarded premier equity growth, the AAA-rated global fixed income and South-east Asian growth funds and the European, US and Jap-anese growth funds.
This could be enough to appeal to cautious stockmarket investors whose investment goals still need to be realised whatever the state of the world's stockmarkets.
Paul Illot is a senior investment adviser at Bates Investment