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Zurich tracks profits

Zurich Assurance

Tracker Protected Profits Fund

Type: Unit-linked fund

Aim: Growth by investing in HSBC FTSE All Share Index Fund, HSBC European Index Fund, HSBC American Index Fund and Barclays Global Investors Sterling Liquidity First Fund

Minimum investment: Lump sum 5,000 via bond wrapper, lump sum 3,000 or monthly 100 via Isa, lump sum 20,000 via pension

Investment split: 100% in global equities

Guarantee: 80% of the funds highest ever price locked in

Charges: Annual 1.58% via sterling bond, annual 1.61% via Sterling Investment Account & Isa/Pep Transfer products, annual 0.58% via Pension Products

Commission: Sterling bond initial 4% plus 0.5% renewal on all terms, initial 6.25% on no exit penalty and standard terms option, initial 6.75% initial on high allocation terms, Sterling Investment Account & Isa/Pep Transfer products initial4% plus renewal 0.5%, initial 5.125% plus 0.25% trail or initial 6.25%

Tel: 0500 546546

Zurich is offering this unit-linked fund via its life and pension products.

Bright Financial Services Paul Breaks admits that he is not a bit fan of tracker funds but feels this product reflects Zurichs continued aim to be innovative and appealing.

Looking at the Zurich fund in detail he says: “As Zurich says, this is the third member of its protected profits fund family. It takes a global passive fund management approach, using global equity index tracking funds from HSBC. It follows on from the successful protected profits fund & multi-manager protected profits funds which have jointly attracted over 1bn since launch in February 2003 and February 2005 respectively.”

Breaks notes that as with the two previous funds, the tracker protected profits fund offers the assurance that the unit price will never fall below 80 per cent of its highest ever value. “The funds equity content can never be more than 70 per cent and can be reduced to zero,” he says.

Breaks explains that the HSBC FTSE All Share Index Fund has a 60 per cent weighting, the HSBC Euro Index Fund has a 20 per cent weighting and the HSBC American Index Fund has a 20 per cent weighting while the cash fund used is the Barclays Global Investors Sterling Liquidity First Fund.

He says: “In essence the tracker protected profits fund is a multi-tracker with a high guarantee. I believe it is unique at this moment in time. For cautious investors who none the less appreciate the long term potential of equities it offers international exposure. I like the fact its available to bond, pension & unit trust/Isa investors. There is no lock-in period and free switching is allowed.”

Assessing the charges Breaks points out they are higher than ordinary tracker funds but are acceptable given the protection provided. He regards the adviser remuneration as comparable with the higher paying insurers.

In conclusion Breaks says: “I would think competition will be provided by the Protected Profits & Multi-Manager Protected Profits already offered by Zurich. This fund sits nicely between the two.”


Suitability to market: Good
Investment strategy: Good
Charges: Average
Adviser remuneration: Good

Overall 8/10


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