Skandia UK: With 152% Increase, Protection Proves Popular

13 June 2008

Structured products are proving a popular solution for those who are nervous about equity investments following stock market volatility.

Structured products are an alternative investment solution for investors who are concerned about losing their capital.

Figures from Skandia show a 152 per cent increase in inflows into its Protected Portfolio Investment (PPI) during the first quarter of 2008 compared to the same period in 2007.

Investors can build a portfolio of funds based on a long-term strategic asset allocation that is in line with their individual risk profile, investment objective and time frame.

Another option is a structured product that enables them to benefit from some of the investment growth but with the added reassurance that their capital is protected against any downturn.

Skandia’s protected portfolio investments are structured to maximise the opportunities for growth alongside security of capital. Unlike the majority of structured products available in the market, actively managed funds are used to determine growth rather than passive indices. So when market conditions start to improve, investors will still have the potential to benefit from stock market growth.

Graham Bentley, head of investment marketing at Skandia, says, ‘The key principle of any investment strategy is understanding attitudes to risk, and for some investors an investment that allows them to enjoy growth should markets rise, with a safety net of up to 100 per cent capital protection at the end of the investment term should markets fall, suits their risk needs.

‘The recent market volatility is clearly making the idea of protecting their initial investment even more appealing to many investors and, as a result, over the last quarter we have seen significant interest in our structured products.’