AIB Govett is launching its first five year protected open-ended fund offering 85% downside protecti...
AIB Govett is launching its first five year protected open-ended fund offering 85% downside protection, subject to approval from the Jersey Financial Services Commission.
The AIB Govett Five-year Protected fund will be based on the FTSE 100 and will be domiciled in Jersey. As yet the exact proportion of any upside in the market investors will receive at the end of the five years has not been calculated but the group expects it to be in the region of 90%. Any growth in the market will be calculated on the basis of when the fund commences dealing and the average level of the FTSE 100 in the final year of the fund's life. Over the five years to 1 May 2000 the index has risen by 130%.
The product will not be available through AIB Govett's own salesforce. Instead it is being promoted and distributed by SFH, a derivative consultancy firm based in the West Country. SFH will market the product among IFAs who then can advise their clients whether to hold the product within a Sipp or fund-link life assurance bonds. The minimum investment into the product is £25,000 and it has an initial charge of 5.5% with IFAs receiving 2% commission. The exact level of the annual charge has not yet been set.
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