The Royal Skandia GBP Shield Fund invests directly in the underlying Skandia Shield Fund and is available to retail investors via the Royal Skandia offshore portfolio bond range.
Royal Skandia said the fund, a risk targeted vehicle offering downside protection, has been launched in response to research which found that 55% of international IFAs say their clients have become more risk averse over the past few months. The research also found 80% of advisers say they are more likely to recommend protected products as a result of recent market volatility.
Dean Bowden, chief investment officer for Skandia International said: “For those investors who can not afford, or simply do not want, to take the chance and potentially experience even deeper price falls than we have seen recently, protected funds can provide the optimal solution.
“The Royal Skandia GBP Shield Fund is offering a high degree of capital protection together with the potential to benefit from rising stock market prices in future. And because the fund is daily traded, investors can dip in and out as frequently as they wish, whilst taking full advantage of all the benefits that this unique fund has to offer.”
The Royal Skandia GBP Shield Fund is a daily priced and traded fund with no minimum or maximum investment period. It is managed to a target volatility of 8% and offers downside protection of 80% of the highest ever share price achieved by the fund. Although protected, the price is not guaranteed and Skandia warns that, as with all investments, protected funds still carry a risk to capital.
Unlike traditional structured funds, the performance of the underlying portfolio is based on total returns so that investors benefit from dividend returns as well as share price gains. A separate derivative is used to provide the downside protection, rather than cash. This means that the fund always retains its exposure to the underlying portfolio, thus potentially benefiting when an upturn occurs.
The underlying fund, which was developed in conjunction with Commerzbank AG, London Branch has, until now, been exclusively available via the Skandia Investment Solutions platform in the UK.
