Platform One bills addition of Citi fund as with-profits alternative

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Platform One has added the Citi 80% Protected Dynamic Allocation fund to its international platform billing it as an alternative to with-profits funds.

The UK and international wrap provider said in a statement that it had added the new fund to its international platform due to an appetite for ‘smoothed’ funds in “uncertain and unstable times”.

The Citi 80% Protected Dynamic Allocation fund aims to achieve long-term wealth generation through investments in global markets, coupled with capital preservation. BlackRock determines the composition of the active investment portfolio while Citigroup First Investment Management provides a dynamic allocation strategy with “a profit lock-in” feature, protecting at least 80% of the highest daily fund net asset value per share, the statement said.

With-profits alternative

The fund is being billed by Platform One as an alternative to with-profits funds that have seen larger than usual allocations in recent years from advisers seeking a ‘smoothed’ delivery of returns for their clients.

Michael Fordham, managing director of Platform One welcomed the new fund addition to the range of asset classes that the firm offers billing it as ideal for advisers firms with clients in the “accumulation and de-accumulation stages in their portfolios”.

A spokesperson for Citi said: “There is a cost or protection but if you didn’t want the protection then there are other funds,” he said. “In volatile times, many people just dont like the ride so you seek to smooth out the peaks and the troughs. People are looking for quality names and Citi and Blackrock are right up there.

“And if they dont want a rollercoaster so the only way to deliver that profile ot a client  is to say we will manage a portion of it and the other portion is allocated towards the protection. If there is a massive market slide then your slide is reduced to 20% maximum.

Potential losses capped at 20%

The Citi 80% Protected Dynamic Allocation fund smoothes the returns and similar to with-profits there is a protected part but with an absolute maximum loss of 20%, even if markets plunge. And unlike with-profits there is no ‘market value adjuster’ where extra exit charges applied to a with profits fund, if too much money comes out.

“We’ve tried to replicate what with-profits delivers on but in a different, we think, better way. It gives the ride but hopefully people wont feel too sick on the way,” the spokesman said.

The fund is available for lump sum investments across Platform One’s fee-based and commission funded platform services for UK financial advisers, multiple family offices, international advisers and specialist product providers.

Management charges applied to the fund take into the consideration the split of protection and are up to 1.25% per annum and initial charges set at 0.85% per annum calculated on the daily advised portfolio (total 2.1% maximum charge per annum).

The minimum investment into the fund is set at £5000 in the UK, €5000 across Europe and US$5000 in the US and globally.