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Protected campaign funds

 

Capital guaranteed or protected investments for private savers

Thanks to its full command of portfolio insurance techniques, and to a high capacity for innovation, THEAM can offer private individuals capital guaranteed or protected investments that enable them to benefit from a market trend at a given time.

These strategies are available via bank networks and the external distribution networks of partners.

Such funds are typically marketed for a limited period, usually between one and three months, which is why they are known as limited subscription funds, and they have a fixed maturity date.

Given the wide diversity in terms of strategy and methodology, the funds can meet a large number of savers’ requirements. The differences between one fund and the next specifically involve:

- INVESTMENT HORIZONS

THEAM’s limited subscription funds aim for a maturity of three to 10 years.

- PORTFOLIO INSURANCE TECHNIQUES

Two main kinds of portfolio insurance techniques

- FORMULA FUNDS

A predetermined portion of the fund’s assets is invested in low-risk assets such as bonds and aims to provide protection, while the remainder is invested in one or several high-risk assets that are also determined at the fund’s inception. The composition of this segment remains unchanged throughout the life of the product. The aim of this allocation is to gain access to the performance of an asset or a basket of assets in exchange for certain conditions that are known when the product is launched. The valuation of these funds is purely a function of the fluctuations in the predetermined high-risk asset, or assets, with no involvement of a portfolio manager.

- BUFFER FUNDS

In this case, the guarantee or protection is also provided by a portion of low-risk assets; however, the high-risk portion, known as the buffer, is actively managed. Accordingly, this portfolio insurance technique may allow the discretionary involvement of a specialist manager in the security selection process.

Why invest in THEAM’s protected campaign funds?

In an environment where economic and financial uncertainty reigns, protecting their capital remains a legitimate concern for investors whose need to combine performance and caution is now greater than ever. The funds with a limited subscription period offered by THEAM enable investors to boost their savings by granting them access to an asset class or a theme that can be financially attractive, while benefiting from partial or full protection of the capital invested.

Accordingly, investors can rely on THEAM’s expertise and experience in portfolio insurance techniques to benefit not only from the performance of a high-risk asset, but also protection if that performance fails to materialise.

In fact, if the performance of the high-risk asset turns out to be below the level predetermined in the prospectus, the buffer effect of the protection kicks in so that the investment can meet the commitment to protect the capital invested at the time of subscription to the fund.

Investment universe & Protection level

- INVESTMENT UNIVERSE

All asset classes may be invested in. Investment opportunities are researched continuously by the relevant THEAM teams. The funds may be invested in a diversified index or a sector, or according to a theme, and even in an active pre-existing fund, for which THEAM then develops a protected version.

- PROTECTION LEVEL

Limited protection funds may involve a capital guarantee (in which case, the level of protection covers 100% of the initial net asset value at the fund’s maturity date) or partial protection which may represent between 80% and 100% of the investment. Depending on the products and the marketing areas, the guarantee may be provided formally by the BNP Paribas Group or it may be implicit.

Videos

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Capital Protection

Jean-Charles Dudek

Files

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Protected Management: New Horizons

Agefi Protected Management pack in partnership - December 2014

Investments in the aforementioned fund are subject to market fluctuation and risks inherent in investing in securities. The value of investments and the revenue they generate can increase or decrease and it is possible that investors will not recover their initial investment. Source: BNP Paribas Investment Partners.