Pioneer Investments in the Czech Republic has launched Pioneer Zajištěný 2018 Rozvíjející se Trhy, a portfolio insurance strategy linked to emerging market equities.
The new fund, which is also Pioneer's first fixed term issue, is constructed to mature in seven years, but will terminate early if the underlying portfolio rises by 20% at any time.
The product's risky assets are linked to actively managed funds, mostly Pioneer's own, shares, certificates and derivatives from emerging markets, while non-risky assets are composed of government bonds, medium term notes and cash. At least 60% of non-risky assets are allocated to securities with a rating of Baa3 (Moody's) or BBB- (S&P). The allocation to risky assets at the beginning of investment term is 25% and the maximum allocation is 100%.
"In recent years, emerging markets are growing dynamically and they are catching up developed countries post haste. New protected funds are therefore a welcome opportunity for long-term investors, who prefer capital protection rather than maximising yield potential, but still want to capture some of the potential of this region," said director of banking and institutions, Peter Simcak.
Currently, Pioneer has two life-wrapped open-ended CPPI funds in its portfolio with assets of CZK1bn (€43m). The first, Zajištěný fond 1, has been running since 2007, while Zajištěný fond 2 was launched a year later. The company used to managed another protected fund, Pioneer PF Euro Protect, but in 2010, three years after its launch, it was merged together with Pioneer Funds Euro Liquidity.
The portfolio manager for the new fund is Zoltan Raba, who works closely with a team focused on structured products led by Mikael Backstrom at the firm's Vienna headquarters.
The fund is open until end of May with a minimum investment of CZK5,000 (€200).
This product is available now in Recent Additions (Czech Republic).