Skandia Investment Managers is offering a new capital-protected multi-fund investment product, with averaging to boost participation levels. The fund manager has chosen to work again with Morgan Stanley on an option plus zero-coupon bond structure, rather than using constant proportion portfolio insurance to capital protect the deal (DW, 5/16/04).
Skandia is offering U.K. investors two variations on the product, one with 100% capital protection and 100% of the upside of five actively-managed funds and another with 80% capital protection and 200% participation in the growth of the five funds. The Morgan Stanley structure makes use of quarterly averaging of the funds' performance to ensure the options written on the funds achieve high participation rates.
Jasper Thomas, marketer at the fund manager in Southampton, said Morgan Stanley was competitive in pricing the product. There are now more firms willing to show pricing than when Skandia first looked into a similar structure two years ago, which makes it easier to ensure a competitive price, he noted. The product, which closes to investors Dec. 5, is capped at GBP30 million.
