Proof is in the pudding for Liontamer capital-protected funds
Managing director Janine Starks told Wellington advisers at an Investment Store roadshow that it was time to bust some of the myths around capital protection. Added cost is usually the first objection put forward, and while Starks accepted this could be an issue, she said Liontamer cuts its own margin if oversubscriptions force it to take out more protection through a fixed interest bond, with management costs built into the product terms.
She cited the recent Australian fund as an example, saying when the fund put in another hedge, "we did so at no margin, because our fees are built in."
Starks also talked down the lack of liquidity in capital protected funds, saying that while Liontamer's older fund had quarterly exit points, its latest funds were monthly with no restrictions.
A major benefit of capital-protected funds is that they remove the risk for investors by ensuring they will keep their principal if markets plunge, Starks said.
Click the button below to subscribe and will have free unlimited access for a limited time to full article and all other articles on the site.
You will also be able to comment on articles on Good Returns.
