It’s time to look at Investment Funds

While confidence in the markets is steadily returning, recent events such as the UK elections and a possible Greek default have shown there is still a degree of fragility amongst investors and fund managers alike. But amidst these blips there have been some great rates of return achieved. So if these lingering doubts are holding you back from choosing an investment fund, perhaps a Protected Assets Fund is the product for you.

How the Fund sets out to Achieve its Aim

The Protected Assets Fund is designed to provide risk conscious investors with greater choice when it comes to investing their money. This fund offers an investment strategy that has the potential to deliver returns from investing in stock markets but with significantly reduced risks.

Global Equity Returns:

  • Performance is linked to the return of five global stock market indices across Europe, North America, UK, Japan and Emerging Markets.

Explicit Downside Protection:

  • Increases exposure to stock markets during times of stock market stability – to gain from potential positive market performance.
  • Reduces exposure to stock markets during times of stock market uncertainty – to limit exposure from any market falls.
  • Protection is in place that ensures, in any calendar year, the value of an investment (before charges) will never fall below 90% of the highest price in that year. Bank of Ireland (BOI) provides the fund protection to New Ireland. If for any reason, BOI is unable to meet its obligations, investors could lose some or all of their investment.

Historically, shares have offered strong returns for investors – as they have the potential to beat both inflation and deposits over the long term. Investors benefit from both the long term rise in share prices and income received through dividend payments.

The fund aims to take advantage of both the growth and income opportunities offered by investing in stock market indices.

Exposure to Global Stock Markets

The investment return is partly linked to the performance of five mainstream global stock market indices (with dividends included):

Asset Split

By investing via stock market indices, the fund also benefits from:

  • A highly diversified equity-based investment – there is exposure across continents, countries, currencies, industries and companies
  • Reduced risk – as the potential risks involved in choosing a single fund manager are removed

Index Investing

Index investing or passive investing aims to remove the potential risk that comes from choosing a fund manager. By tracking an index the fund tracks the performance of stocks trading on that index. Index funds manage risk by choosing to only track an index, and in turn can be considered less risky than an actively managed fund where a fund manager chooses what specific stocks to invest in across different sectors and geographic regions.

A Proven Approach

Since its launch in December 2010, global stock markets and economies have experienced signifi cant periods of turbulence, periods of market recovery and subsequent outperformance. The chart below demonstrates how the fund has performed since launch:

  • Protecting investors when needed
  • Sharing in global stock market returns

To show this, we have compared the performance of the fund to a basket of global equity indices since its launch. This basket is made up of the five global stock market indices that the return of the fund is linked to – the Eurostoxx 50, S&P 500, FTSE 100, Nikkei 225 and MSCI Emerging Markets (EEM). Exposure to each index is in line with the Protected Assets Fund’s exposure to each of these indices.

Past performance

Looking at the chart we can see:

  • How more stable the performance of the fund has been compared to that of the basket of the indices
  • Late August 2011, highlighted as 1 on the chart, was a very turbulent time for markets. For the fund, as market volatility increased the actual exposure to indices fell and a greater share of the fund was moved into cash to protect investors
  • The chart also shows how the rest of 2011 remained quite volatile for markets, but the fund remained stable
  • From the end of 2011, markets began to recover and as volatility fell and the recovery took hold, highlighted as 2 on the chart, the fund shared in the gains

At PGM, we can help advise you on what fund is best for you, depending on your needs and ambitions. If you’d like more information on this fund or would like to explore what other avenues are available to you, then speak with us today.


Warning: The value of your investment may go down as well as up. This fund may be affected by changes in currency exchange rates. Past performance is not a reliable guide to future performance. If you invest in this fund you may lose some or all of the money you invest.


Posted in Financial Advice, Financial Services, Investments.