Smart Investment Management, the investment arm of Australian platform provider Praemium, has added clean share classes to its Smartfund 80% Protected range.
The funds were made available to the international adviser market in September 2015. Without trail commissions, the clean share classes cost investors an annual fee of 0.5%.
The Smartfund 80% Protected range is aimed at investors who cannot afford to take the risks usually associated with equity strategies – such as retirees or those approaching retirement – but who also want exposure to growth assets.
It achieves this by what it calls “an innovative option-based approach” that ensures the net value of the fund’s value is at least 80% of its record peak. Every time the fund reaches a new peak, the guaranteed amount also increases. US bank Morgan Stanley provides this capital protection.
So far this hedging strategy has delivered. Since its launch in September 2015, the growth and balanced funds have significantly outperformed the MSCI World Index, returning 1.3% and 1.1% respectively, compared with the MSCI’s -4.2%.