Royal Skandia has launched a risk-targeted fund aiming to offer downside protection.
The Royal Skandia GBP Shield fund invests directly into the Skandia Shield fund and is available to retail investors through Royal Skandia’s offshore portfolio bond range.
It targets a volatility of 8% and offers downside protection of 80% of the highest ever share price achieved by the fund.
The performance of the underlying portfolio, Royal Skandia says, is based on total returns so that investors benefit from dividend returns as well as share price gains.
Instead of cash, the fund uses a separate derivative to provide the downside protection.
Royal Skandia says that “although protected, the price is not guaranteed and, as with all investments, protected funds still carry a risk to capital”.
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