View more on these topics

Skandia provides shelter through protected price

Skandia Investment Solutions has teamed up with Commerzbank for the Skandia shield fund.

This capital-protected Sicav is linked to the performance of a basket of 16 asset classes. The basket comprises equities across the UK, US, EuroZone, Japan, Australia, China, India, Brazil and Russia; UK, US and German government bonds, US liquid investment grade bonds, US aggregate investment grade bonds, US liquid high yield bonds and emerging market bonds.

The fund does not invest directly in the asset classes. Instead, it invests in cash, cash alternatives and derivatives which track the performance of the asset classes. This part of the portfolio reflects the reinvestment of dividends or interest generated by the asset basket and cash holdings, and not all protected funds do this.

The capital-protection provided works through a derivatives contract with Commerzbank, which acts like an insurance policy.  Skandia pays premiums to Commerzbank for the derivatives contract which creates a protected price, so that the fund will always be at least 80 per cent of its highest ever price.

Asset allocation within the basket is reviewed monthly by the Skandia Investment Group. The balance between the exposure to the asset class basket and cash is also adjusted monthly depending on the volatility within the asset basket over the last 20 days. When volatility is higher than 8 per cent, exposure to the basket of assets will be reduced in favour of cash and when volatility is lower, exposure to the basket of assets is increased while cash is reduced. Up to 100 per cent can be held in cash, while maximum exposure to the basket of assets is 150 per cent as it can be geared by 50 per cent.

This fund may appeal to investors who are concerned about market volatility, but not all investors will understand the volatility strategy and the capital protection provided through the protected price.



FSA warns that failed bank bosses could have pay clawed back

FSA chairman Lord Turner has warned that bosses of failed banks could have two years’ pay clawed back from them. Speaking to the BBC, Lord Turner said he was attracted to the action as it would discourage banks from taking excessive risks. The rule is already in place in the US. The FSA has recently […]


MM Leader: Standards must be met but over longer timeframe

It has been easy for politicians and advisers to attack aspects of the retail distribution review. It will be harder to push forward with palatable solutions to address the huge amount of concern in Westminster and around the country. Political pressure on the RDR is likely to increase in the new year with the Treasury […]


£1.25m cost of FSA Xmas parties

The FSA spent over £100,000 on staff Christmas parties last year despite the outcry over the previous year’s figures, taking total spending to £1.25m since 2004. Information obtained by Money Marketing through a Freedom of Information request, from recently audited figures, shows the regulator has spent a total of £1,259,624 on staff Christmas parties over […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm