3 September 2003
Zurich sees over £110 million invested so far in its Protected Profits fund in 2003.
Zurich Financial Services today announces that total investment in its unique Protected Profits Fund has now exceeded £110 million since launch in February 2003. During the last fortnight alone, current new investment has increased to an average of £1.3 million per day.
Developed in response to volatile investment markets and consumer demand for more cautious investment options, the fund’s value will not fall lower than 80% of its highest ever value. The fund’s flexibility allows investors to switch in and out of the fund at any time across all Sterling products and full Sterling fund range*.
There are two funds providing investors with a unique combination of exposure to equity markets, together with the ability to switch in and out of either fund at any time (without penalty).
The Sterling Bond Protected Profits Fund has seen growth of 9% since launch and people who invested at launch now have over 87% of the value of their investment protected. Those clients investing via the Sterling Investment account have seen their fund grown by 11% and those who invested at launch now have over 89% of the value of their investment protected.
Since launch, funds have moved between equity and cash every day – the average equity content of both funds is 65% (lowest equity level: 53% and highest equity level: 69%).
Most other ‘protected’ investments usually restrict investors with tranche-based products whereas this fund does not confine investors to minimum investment periods.
Other Key Features:
- No Market Value Reductions (MVR) or lock-in period**
- No fixed maturity date
- Transparent with clear and simple charging structure and prices published daily
- Switching – the fund’s flexibility allows investors to cash in, or to switch into and out of the fund at any time, free of charge, within all Sterling products and fund range, although excessive switching may be charged for
- Continuous protection
- Available across all onshore tax wrappers
Paul Wright Marketing, Zurich’s Investment Marketing Director commented:
“We have seen a fantastic response to the launch of the Protected Profits fund. This really is the right fund launched at the right time. Given the uncertainty of the UK stockmarket in 2003, we expected some success in launching an equity investment ‘with less risk’, but the impression it has made on IFAs and customers alike has exceeded even our expectations.
“Protected Profits offers up to 70% exposure to equities, with a maximum of 20% risk. Because of this, many IFAs are using the funds as an alternative to with profits.”
* Fund switching is currently free of charge but an administration charge for excessively frequent switching may apply.
** Product wrapper charges may apply depending on the underlying investment vehicle chosen.
-Ends -
Notes to Editors
1. The fund has been available for ISA/PEP transfers and Sterling Investment Account business from 3rd February and for the Investment Bond from 17th February.
2. IFAs should call ZIFA on 0500 546 546 for further information.
3. Sterling Protected Profits
- Combination of three Threadneedle Asset Management equity funds and a cash fund.
- Initially the weighting of the Threadneedle funds will be split 60% UK Institutional Growth, 20% American Growth, 20% European Growth, but the mix will change over time.
- Dynamic asset allocation adjustments are made on a daily basis.
- Maximum 70% equities, minimum 30% cash
- Equity proportion is typically 3.5x the difference between the current fund value and its protected level
- Unit price never falls below 80% of previous highest level
- Protection level can be higher on initial investment
- The protection is underpinned by a AA-rated large UK-financial institution
- The protection is at a fund/unit price level, not individual so that exiting investors are not disadvantaged
Threadneedle UK (Institutional) Growth Fund (at 31/7/2003)
- £1,933m in size
- Launched 30th September 1985
- 2nd quartile performance over 3 & 5 years
- Fund outperformed sector average by 1.1% over 5 years
- S&P AA rating
Threadneedle European Growth Fund (at 31/7/2003)
- £442m in size
- Launched 30th September 1985
- 1st quartile performance over 3&5 years
- Fund outperformed sector average by 19.3% over 5 years
- S&P and Forsyth-OBSR ‘AA’ rating
Threadneedle American Growth Fund (at 31/7/2003)
- £695m in size
- Launched 5 February 1968
- 1st quartile performance over 3 & 5 years
- Fund out-performed sector average by 20.4% over 5 years
- S&P and Forsyth-OBSR ‘AA’ rating
4. Note on Charges
- Total AMCs are:
- 1.75% for Sterling ISA, PEP Transfer and Investment Account products
- 1.60% for Sterling Investment Bonds
- Product wrapper charges are in addition
5. Sterling
- No loss on death guarantee across all products
- Commission levels and flexibility
- 5-star service
- IFA Advantage+
Zurich Financial Services is an insurance-based financial services provider with an international network that focuses its activities on its key markets of North America, the United Kingdom and Continental Europe. Founded in 1872, Zurich is headquartered in Zurich, Switzerland. It has offices in approximately 50 countries and employs well over 64,000 people.
Zurich Financial Services, (UKISA) is part of the Zurich Financial Services Group and comprises the Group’s operations in the UK, Ireland and International Businesses.
For further information please contact:
Fay Ford/Erica Harper
Zurich Media Relations
Tel: 01793 505120/503969
