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Zurich applies CPPI to active fund range

Zurich says it anticipates little competition for its multi-manager protected profits fund because other companies using constant proportion protection insurance are focusing on passively managed UK funds.

The Zurich fund applies CPPI to a global range of four actively managed funds – Cazenove UK growth & income, Gartmore European select opportunities, Newton higher income and DWS American growth.

These funds comprise up to 70 per cent of the overall portfolio, with the remainder invested in cash through the Barclays liquidity first fund.

Under the CPPI process, equity exposure will be increased when the fund performance is strong but reduced in favour of cash when performance is weak, thereby protecting 80 per cent of the highest fund value.

Investment management director Paul Wright says: “Our fund is unique. Without wanting to appear arrogant, we are not afraid of competition. It would be a huge leap for our competitors to move from using CPPI in passive UK funds to global active management.

“Also, we are the only ones offering this approach across a range of products. Our competitors are offering it only through investment bonds.”

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