pension - New Ireland Assurance

HIGHLIGHTED FUND FOR QUARTER 1 -
ELEMENTS (PENSION) – 2 YEARS ON
“We Elements define recently risk as passed losing its money second for birthday our clients” having Mr By Continuous default, development a passive or and consensus refinement type of the offering Elements will
With James
achieved over Harries,
a €65m very
Fund
solid invested Manager,
return in for just BNY
investors. over Mellon. 6 Up months, to the end our period subsequently
portfolio has - already including
hold increased a
the
similar
addition as weighting. early of growth some
However in new the asset fund with
Protected We have recently Assets Fund launched is one a new of the fund fastest in conjunction growing has financial seen stocks the protection leading level the rise decline to 95.3% in global (as of equities June
2011 of March clearly 2012, illustrated the fund again, returned just in how excess volatile of +10.6%* markets
• classes If equity e.g. markets Emerging fall Markets in value equity then typically with dividend the value bias
funds in the Irish market. Uncertainty in the global 6during Spotlight As
with
pension
Bloxham,
offers investors
the
investors
Bloxham
get close access to
Defensive
their to retirement SSgA
High
Ireland’s date,
Yield
th )*. of The the
put result month
options of of this August
rise. early Hence,
2011, growth our
if is BNY that markets between Mellon
were
Global now
can cumulatively be over since the inception. short term, and how traditional
to
Participate in any market recovery - many of the
economic it is very important recovery that is clearly they protect coming the through fund that in they stock and
Real
and Emerging
leading
Fund.
existing
experience the
Return
year protected end
Fund
Markets
significant the
had
solutions most
no
debt
the falls exposure
- help to
available fund in value, can
to
further
today fall
this then (from
sector
diversify
run
the
the its profits
risk price
the
the
managed portfolio funds, of while stock providing ideas and solid reflects diversification the stock for market fund and
market have built volatility up over over time, the to past safeguard few months the pension with investors that on of clients June on the during to reduce
6th) missing
put no options this the period dependence
longer out would 10% market but help (Source: on traditional
recoveries in fact off set BNY
just some Mellon, asset
4.7%. due to
of
the
the
picking clients, Who might still skills do Elements not of a allow be
select fund suitable
team managers for?
of analysts. the scope As be a December classes.
remaining can The be current bought very volatility cautious retirement. of share in their Typically, prices approach is this making to involves investing, clients bulk losses 2011).
of clients' within The
money the decision
actually fund (N.B. of the
being this fund
in cash fund manager
in order does to
not
concentrated
able Investors manage are rational
reducing the
fund
short –
exposure
– it
term they
typically
volatility expect
of an investment
holds
or additional
between
market risk. reward
to equities.
15 and
With
demanding greater downside risk protection.
The
to hold
reluctant to invest. This new fund aims to provide protect provide result
any
values of capital financial
all in of a these protection). stocks
falling key market. points
came from
This that
their
simply the
belief
Protected
that
volatility return for likely additional to be here risk to stay and over also the recognise coming years, the
can not
40 While stocks equities – is offer a pure the and greatest honed long expression term potential, of SSgA happen
the Why downside Elements
in the
risks different
Protected
of holding - managing
Assets
financials market
Fund. The
outweighed risk
Fund has
the
clients importance opportunity continue to of share patience. to in market demand However, returns much not but everyone greater without has all risk of a Assets Fund provides your clients with:
Ireland’s over the value short term philosophy they can of investing experience high significant quality been potential Elements aims
designed gain, to
so again maximise
that exposure highlighting return subject
to equities how to active a risk limit
can rise risk
Protected management
businesses fluctuations
long the risks. time horizon Assets of their Fund
which in price
and investments. some is a unique
SSgA which
investors offering,
Ireland is believe not suitable
are simply unlike
trade cheap for
more any
an to quickly It management of is 9% important per
once
annum.
markets is to at note the To that stabilise. very put the core this amount of in every context, of decision insurance a broad made that all
other protected fund in the Irish market today. We have • A passive investment approach
their
investor cautious
fair value.
close by nature, to retirement. especially in today’s world. can within equity
all learned from the past that funds offering protection in •
be fund this
Benefit
purchased would fund, typically
of dividends
will and depend no have constraint a
by linking
upon risk of the between of
to total
amount relative 17%
return
of
When • we Returns launched - continues our BNY Mellon the successful Global Real strategy Return
Elements may be a solution for these investors as of it
Unlimited income benchmarking!
and 20%
indices that per
growth the annum. fund potential
This can risk
- generate there
limit
are
obliges from no limits
the selling manager
or any
a Fund volatile in March high market yield 2010 typically equity we wanted investing have to to move bring an a large international
call
The Our aims new fund to actively Protected not constrained manage Assets investment Fund by its provides benchmark risk by amount
a limiting new (the restrictions the upside growth potential for clients of
of
fund
MSCI option clients’ • manager Risk
World for money reduction to
pension into
the Irish
Index) investors safe – risk market
assets management
and simply as such
with a
selects they as
proven
approach cash strategy with
track to
options. to pay • attention A Hence dynamic to the market investment level developments of protection strategy, will and with vary sell explicit riskier on a
a
record
exposure
in
to
reduce absolute
riskier assets.
Overall the strategy of the fund is structured such that the
the return risk that investing, comes with from a investing the clear most and in
the quarter assets Protected by downside if and quarter Assets when protection basis. necessary. Fund. Decisions Some on selling investors call options take a
large
compelling
retirement, number one of
stock
that these
ideas
can funds
regardless
offer becoming the growth ‘cash
of geography
potential locked’. of
manager maintains a core of return seeking assets,
transparent equities. investment The fund offering may for your forego clients. some of the or and long • buying term No risk (strategic) put of options being approach cash will be locked at which the and discretion precluded indifferent of from the to
This equities A review effectively while of the explicitly last meant 2 years managing that clients market had risk: little or no
which is then supplemented with a range of hedging or
industry. upside For example, returns in if contrast markets to rally its benchmark, strongly, but the the The fund Protected any Assets recovery fund is after an ideal a period solution, of decline
risk
short manager. reduction
term market
assets
moves.
that they
But
can
for
use
those
to offset
whether investors
prospect of getting back into equities subsequently
fund
For Elements’ traditional
currently fund first is benchmarked 2
holds expected years were
no utility to outperform investment marked by
stocks. In if funds,
a markets major
similar
the bouts fall. vein,
fund of
the
looking • No for cap a single on upside investment growth or for a fund to act as
volatility concerned or risk with within short the term core. market risk, Elements goes a
managers becoming Growth volatility in - are precluded growth investment motivated potential from markets. to any compete for upturn clients Notable against or causes recovery the either Fund were an in part of an overall portfolio. This truly unique new fund
the
comes
fund’s
from
exposure
exposure
to
to five
Hong
mainstream
Kong-listed
global
stocks
stock
is Summary step • further Return by keeping linked an to eye the on more performance immediate of term 5
index markets. the 1. Stock Japanese or indeed selection earthquake, each process other. tsunami As a result, and at the times resulting fund can act as mainstream the foundation global or stock-market core part of indices. any pension or
driven market by indices*, the cheap namely quality Eurostoxx stocks 50 we (50%), find there S&P 500 and So
investment
(tactical) how has developments all of this theory
portfolio.
and responding worked reality? appropriately Over the in
managers nuclear incident, may lose the sight loss of whether its triple an A status investment by the is The
not (25%), Protected by FTSE its weight 100 Assets (10%), in Fund the Nikkei is benchmark linked 225 to (10%) the – performance
incidentally and MSCI
calendar
The
an attempt
issues year facing
Protected
to of
Assets
dampen 2011 many the
Fund
the
investors fund
is
impact produced are
available
of
to
across
extreme a try positive to achieve
the
market return
attractive New
Spotlight’s Emerging
USA, The fund a slowdown in invests valuation in
recent Markets
in around terms
exposure (5%).
growth as 40-45 they
The
within large focus Hong Fund
major global upon
Kong aims
developed relative stocks
stocks take
reasonable of
of five mainstream global stock market indices, namely was Ireland *
moves. 2%* with
The indices product
Facilitating
returns a volatility whilst
and platform relative
this of
and exposure
active
at 6.2%*. the
suitable
response
same This compares time
to for each both index single
to
reducing
market very
and cand
almost
advantage economies which not pay absolute out and higher valuation!
double
of the than
its exposure
both ongoing average Clients dividend yields. The
the
to Swiss
growth crisis are in no
stocks.
and the longer
income eurozone. willing unnecessary favourably risk within portfolios. We believe that Eurostoxx be varied at any time.
opportunities fund accept seeks a 50 claim out (50%), offered
of stocks outperformance S&P from which 500 exposure (25%), are by FTSE in only
to a being
company 100 position (10%), down
regular
developments
with
premium
is
the
products.
important
Consensus
The
– hence
fund,
fund is
the
a fair
daily
focus
proxy
priced
on
for
liquid
the
Against this volatile background, Elements sought to new average Bloxham managed Defensive fund, which High produced Yield Fund a negative will with help -2.7
Nikkei 18% shares progressively in 225 value by including (10%) when grow and the their market MSCI benefits dividends Emerging is down from over 20%! dividends. Markets the medium (5%). The n
investments
o minimum lock
and
in
the
period,
capacity
and offers
to
a
make
unique
agile
solution
and
The protect fund investor manager capital achieves from this the portfolio worst positioning declines and by in %* vestors over the achieve same this period aim with on a medium volatility term of 10.2%*. basis. Since
The importance term. percentage Dividends of can exposure dividends be an indicated important should was source never at of time return be
to ** meaningful For act as the the Protected asset
foundation
allocation Assets or core
changes. Fund, part the of
The Governor any
fund’s
pension and asset
The
or
working The importantly
underestimated. BNY closely Mellon allowed with Global Dividend the them Real research to Return benefit
payments team Fund during distilling benchmark periods
can a list of ninception ew fund in could March be 2010 used the as fund the has core produced component a return
ais
of a
Company of the Bank of Ireland is the current provider
launch from investing and this in equities. can vary. For The example, fund between aims to 1950 take investment portfolio. Full details of the Protected Assets
of significant thoroughly contributor researched to investors' investment long ideas term returns. into a of diversified
of allocation 11.67%* is
the protection portfolio
versus driven Consensus by valuation
to New offering Ireland. investors
return and risk, of
New Ireland exposure
4.16%*, it is therefore
will to
with
pass high
a
to recovery. achieve an absolute return of 4% above cash
advantage and 2010, of dividend both the income growth accounted and income for opportunities
44% of the Fund little unconcerned over
portfolio of high conviction stocks offering an attractive on quality the
are
full global available half by the peer volatility.
value equities. of the
from
group
amounts
your
positioning.
More Broker
it information receives
Consultant
from about Bank
or in
of
the
(Euribor) over 3 to 5 year rolling periods. It aims to
the
offered total return from these of indices S&P500 which * . Another are total advantage return indices of fund Ireland brochure to investors. available If for on www.newireland.ie
any reason Bank of Ireland
risk-reward achieve The nimbleness this
Managing market profile. by investing of the fund
risk The - fund in served a
a two manager wide to range protect
pronged therefore of investors’ assets
approachdraws
such Bloxham The In turbulent BNY Defensive Mellon periods Global High the formal Real Yield Return risk Fund management can fund be truly found offers in very you the
or investing equivalent in high and yielding therefore stocks include is that, the typically, benefit these of cannot meet its obligations, investors could lose some
firstly
as capital
1. Dynamic
shares, as the
on the
government asset mix in
investment depth and
and breadth management
corporate fund was changed
of experience
bonds,
strategy
alternative swiftly
of SSgA - the fund brochure.
dividends. all of their investment in this Fund.
Ireland’s first tend level to out-perform of As
research risk the management fund the broad based
team and within index
uses the on when
his Fund passive markets
experience, is similar equity are
For
and agile your
the
asset clients
Protected
allocation the opportunity
Assets
approach
Fund,
in of Elements market
the Governor
related works returns, well
and
to
assets when necessary, such as using commodities the expertise and of a course specialist cash team and in
but
money investment,
analysis
to declining the market concept * . it does instruments.
and judgement
we not introduced involve As manager the
in constructing
with benchmark risk.
Company
protect with significantly the
of the
investor. reduced
Bank of
Indeed, risk.
Ireland is
Elements
the current
could
provider
be
of
a
State Street Global Advisors Ireland Limited. our
a
hugely is an
* Source: Bloxham
absolute
portfolio
successful benchmark Secure Advantage rather than series relative of (which investments we have the
suitable
protection
‘core’
and
investment
the return
for
to New
investors
Ireland.
with
New
a medium
*Source: MoneyMate. Performance of the BNY Ireland Mellon
which Managing The • stocks aims
Increase
to market selected outperform
client's risk: will the The exposure ensure market.
**Call options: The buyer of a call option has the right (but is not obliged)
been This ongoing used to active in the asset past) allocation it allows Protected the has broad to fund resulted
stock diversification
Assets manager markets
in the Fund the will
risk
pass
tolerance.
on the full value of the amounts it receives from
to Global buy an Real asset at Return a predetermined Fund series price on 6 or and before the a fixed New date Ireland in the
freedom uses
following both a terms dynamic during to distribution manage of times geography risk
as the of at
management fund stock the and end from market industry of both March
strategy, stability a sectors. risk 2012: and - which to return gainis
Bank future. Pension of Ireland Consensus to investors. Fund series If for any 6 from reason 1/1/2011 Bank of to
Because
prospective, from of its potential high-conviction positive market nature performance. the fund is
based on a very without simple having concept; any concern about what Ireland 01/01/2012 cannot is quoted meet its gross obligations, of tax and investors fund management could lose
suitable other 2. Using • managers Corporate Reduce to options investors are exposure Bonds doing. generate who Differently to stock have income markets also an 38.79% (to appropriate traditional purchase during some
+Put charges. options:
or all of
The
their
owner
investment
of a put
in
option
the fund.
has the
The
right
protection
(but is not
in
investment managed
• Government
protection)
Increase times funds, horizon of the uncertainty exposure
and fund
Bonds are can willing
to use - to stock derivative limit to accept exposure 10.08%
markets instruments the higher
during from obliged) to sell an asset at a predetermined price on a fixed date in the
the fund is before charges are deducted.
level of risk times
any that market
of is stability associated falls.
to gain with from this potential type of strategy. future.
such
•
as
Global
put and
Equities
call options to further manage
25.74%
some positive of
• Emerging Markets 7.62%
As the The downside a Bloxham concentrated market risk performance
Defensive of holding fund High the it may assets. Yield be Fund suited will to use a * Performance is quoted gross of tax and fund management charges.
• Alternative Investments 9.29%
core-satellite 2. options Explicit Reduce to downside generate approach exposure income protection where to stock for the investors markets fund. The during allocate fund times will a
portion
This
•
The sell 3 Protected strategy
Property
month of their uncertainty call
effectively Assets assets options to to Fund limit an ** allows
on active includes exposure some
the
higher of
fund
4.84%
another from risk
manager
stocks any layer strategy market held ofto
hold
•
while
protection the
Cash
within retaining the falls assets
fund.
for clients. they
This the bulk essentially
By want using to hold,
of their
a
exchanges
protection rather
3.64%
than
assets in
policy, assets
some a more of
the
the
they Fund have provides to hold an explicit because promise of their that benchmark! in any calendar 2011
moderate
year,
potential upside
value
risk strategy.
With the fund now of
in
an
the
up investment
share price
and running to
the
generate
since Fund September (before
income.
James Skehan,
has Source: given SSgA us 31 a March number 2012 of prime examples of just where
Pension Sales Manager,
charges This income are deducted) will typically can be never used to fall buy below protection, 90% ofas
The 2010, this simple
its highest success this process point has
value of this can huge
in that approach be relevance. clearly seen Using
calendar is evident to an be example working
New Ireland
described below.
year**. This the
exceptional effectively of the MSCI
provides explicit
with World
performance the
protection
equity Index
of exposure against which
for the times Spotlight to
of
date many
severe fund having passive
over market
been the
three as
and
disruption. 3. low
indeed
Focus years as 45%
active
on to added and
funds
the as end protection high
are
of as
benchmarked,
February 90%.
this index at
Warning: The value of your
the end of August 2011 held just under 2011. investment
24% The weighting fund may go down as well as up.
outperformed Warning: the benchmark If you invest by 22.08% in this en fund route you to could a lose some of all of the money you invest.
Explicit to financial downside stocks. protection: The Protected Assets
cumulative The fund aims return Warning: to of use 31.2%* Past the performance in income the three-year it generates is not period. a reliable from guide to future performance.
Fund selling includes call options Warning: another to This buy vital insurance fund layer may of protection be against affected significant for by your changes in currency exchange rates.
* clients, market Performance with falls Warning:
i.e. explicit is to quoted buy promise
The value
put gross options that
of
of before
your investment
taxation +
some charges, and of fund the
may go down as well as up.
the
management fund major cannot
Warning:
stock market fall charges. below
Past
indices: 90%
performance
of its highest
is
value
not a
in
reliable
any
guide to future performance.
*Source:
calendar year.
Warning: MoneyMate.
In practice
This
the
fund Performance
protection
may be of Elements
level
affected S6
for this
by from changes 18/02/10 to in 02/04/12 currency is quoted exchange gross of rates. tax and charges.
5