Abysmal showing by guaranteed funds

Article Abstract:

Guaranteed funds are aimed at cautious investors who wish to avoid losses that could result from a market downturn. They have proved to be expensive at a time when stock prices are rising, and this is shown by their performance figures which show wide differences between funds, and some funds reporting losses. Performance is affected by a variety of factors such as charges, management of the funds, and the way that guarantees have been set up. There is increased volatility in the market compared to 1996, when many such funds first appeared.

Portfolio Management, Analysis

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Disappointment guaranteed

Article Abstract:

Two Hong Kong funds are offered by Manor Park, the Hong Kong Security Fund, and a version in US dollars, both offering a range of market exposures and guarantees for capital. Hong Kong could present risks, both political, related to the planned handover to China, and risks arising from a rise in US interest rates. There could also be problems if China does not achieve a renewal of most favored nation status in trade with the US. Unit trusts of investment trusts may be a better way of gaining exposure to this market.

Economic aspects, Hong Kong

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Guaranteed by name, but not by nature

Article Abstract:

UK investors can choose from a number of funds offering guarantees but they should be aware that these funds may have drawbacks. Guaranteed funds may not be totally risk free, and this may only be apparent from the small print of the marketing material. These funds tend to be chosen by investors who are especially keen on avoiding risk, so hidden risks can be a problem. There is also limited regulatory protection since products are developing faster than the ability of regulators to control them.

Personal finance

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