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Protected funds will take over, says Close

Protected funds are going to overtake with-profits as a low-risk smoothed investment vehicle, predicts Close Fund Management.

It says life offices have not being paying out to policyholders the full ret-urns on with-profits and the continuing concern surrounding the obscurity of with-profits policies will turn investors towards protected funds.

It says protected funds, which can guarantee from 95-100 per cent of an inv-estor&#39s capital, work on the same principle of providing smoothed equity returns as with-profits but are more transparent and flexible. The Close protected fund range allows investors to leave the fund at any time.

Because returns on protected funds are linked to the stockmarket, Close claims this makes them more transparent and easier to understand than with-profits returns.

Managing director Marc Gordon says: “We believe they are the ideal alternative because they ach-ieve the same objective, give better returns because unitholders receive all the returns and are more flexible. We can deliver smoothed returns with low volatility.

“Returns are linked to the stockmarket as opp-osed to being calculated in a untransparent method. How many people get their with-profits policy statement and don&#39t have a clue what it means? Pro-tected funds give complete and total certainty of capital and are very transparent.”

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