Australia-based BT Financial Group has launched a capital-protected product aimed at investors seeking to boost their retirement or investment portfolios whilst preserving a minimum outcome.
"Clients have been crying out for retirement products that preserve capital when markets fall but still provide opportunity for growth on the upside," said Rodney Greenhalgh, head of retirement at BT Financial Group. "Since the global financial crisis we have seen a flight to safety as retirees who saw no alternative turned away from market exposure and changed their portfolios to cash investments."
Investors and advisers will be able to select a series of managed funds that they would like to protect from a range of over 80 managed funds. A set formula is then used to distribute the client's investment across the chosen funds and the BT Capital Protection Fund. Investors will have the option to make withdrawals or switch off the protection at any point, said BT Financial.
BT Financial Group said that it has spent over two years working with advisers and investors to build a new style of capital protection that allows investors to protect their investments and which also allows flexibility and choice in how much of their portfolio they want protected, and for how long.
"We have designed this in collaboration with investors and advisers every step of the way," added Greenhalgh who is responsible for driving, implementing and executing the group's retirement strategy. "What we have built is a unique capital protection product that gives investors a known minimum outcome with the opportunity for growth without the restriction of being locked-in."
According to Greenhalgh, over half (53%) of Australian pre-retirees aged 50-64 are holding cash to protect themselves against a capital loss, while 47% are holding cash only as a temporary strategy until the markets improve.
"This is clearly understandable but it may mean that they miss out on opportunities to grow when markets perform well," he said.