It is safe to say that investors are currently experiencing a very difficult time. We are experiencing very high levels of volatility with the only thing certain being uncertainty.
Coupled with high volatility in investment markets, investors are at the same time having to deal with high inflation and low, if indeed negative, returns on cash.
It is not then surprising that we might look for some level of security on our investments. So where can the cautious investor turn?
With all this in mind, it is an opportune time for some to look at a low risk investment solution with strong guarantees.
Who Are Cantor Fitzgerald?
The key features of the Cantor Fitzgerald Global 85% Progressive Protection Bond are as follows:
- The investment provides Continuous Upward Only Capital Protection at a minimum of 85% of the original capital In fact, when ‘Buying the Dips’ recent investors in the fund have received over 94% initial hard capital protection from the outset.
- As your investment grows over time, the upward only nature of the protection means that the 85% protection moves along with your investment. This ensures that a minimum of the highest recorded valuation of your fund is repaid when you exit the fund. We will look at a graphic depicting in real time this protection in action later.
- It has no fixed term and has daily liquiditye. you can access all or part of your funds at any time without penalty.
- Returns are linked to Fundsmith Global Equity and PIMCO Global Investment Grade Credit Bond Funds.
- The Bond looks to maintain a 6% volatility level within the fund, aiming to smooth out investment returns over time. At times of high volatility, the funds control mechanisms will allocate less than 100% to the Equity Fund. At times of low volatility (below 6%), exposure to the Equity strategy will automatically be 100%.
- 85% Max NAV protection is provided by Société Générale (Moody’s A1/S&P’s A/Fitch A+).
- No entry costse. 100% of your capital is invested from the outset.
- The minimum initial investment is €25,000.
What is The Risk Rating Attaching to this Fund?
When categorising investment risk, we work from a common grading system, ensuring we can compare investment risk on a like for like basis. This common grading works on a scale from 1 (Lowest Risk) up to 7 (Highest Risk). The Global 85% Progressive Protection Bond has a risk rating of 2 (Low Risk) and as such is suitable for a very cautious investor.
Lets take a look a closer look at the underlying funds that make up the Global 85% Progressive Protection Bond:
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This fund invests in High quality businesses that sustain high return on capital employed, where:
- Advantages are difficult to replicate.
- Significant leverage is not required to generate returns.
- High degree of certainty of growth from reinvestment of cash flows at high rates of return.
- They are resilient to change, e.g., technological innovation.
- The fund has 29 holdings.
A snapshot of Sample Companies held Within This Fund (holdings are subject to change)
85% Upward Only Protection In Action
The following chart depicts the valuation of the fund from its inception, as well as the upward only capital protection level maintained within the fund:
You can see that as the fund increased in value from May 2020 to August 2021, the capital protection barrier moves upwards accordingly. When the fund experienced a pull back in performance at the earlier part of 2022, the capital protection remained steady. This is ‘upward only’ protection working as it should. You can see that investors are now being rewarded with the peace of mind that circa 99% of their original capital invested is protected, regardless of future market volatility.
If you think that this strategy might be of interest to you, call us here in Wealthwise Financial Planning for impartial, independent financial advice.
June 2022
