Canada Life International (CLI) has added a new capital protected version of the Julius Baer Physical Gold Fund to its offshore bond proposition.
The Isle of Man-based life company is the only UK distributor to offer access to the capital protected version of the fund and the fund itself, which is listed on the SIX Swiss Exchange and for which a sterling share class has recently been created.
The structured version offers 95% capital protection and Julius Baer said participation in the upside of the fund was “close to 100%”, though would not reveal the precise figure.
According to Julius Baer, the Swiss wealth and asset manager, the Physical Gold Fund returned almost 33% between launch on October 24th last year and July 24th this year and has attracted inflows of more than $1.7bn.
Stephen Moore, executive director and head of UK sales for Julius Baer International, said: “Investors are increasingly turning to gold as a strategic asset allocation play to improve the risk/return profile of their portfolios.
“This product enables investors to achieve this objective without concern over the possibility of a fall in the gold price. Julius Baer forecasts that the gold price will reach USD 1,050 in 2010, the low cost of this product will enable investors to capture the majority of upside performance with very limited downside risk.”
CLI said investors in its offshore bonds will be able to make free switches between the protected and unprotected versions of the fund.
The fund invests exclusively in physical gold, primarily in standard 400-ounce bars which are stored in Swiss security vaults.
The fund’s base currency is the US dollar, the currency in which gold is traded. Its share classes in GBP, EUR and CHF are currency-hedged against foreign exchange risks in relation to US dollars. This ensures fund performance is not distorted by currency movements which can otherwise significantly impact investment
The addition of the protected fund comes as CLI has extended until the end of September an extra allocation of 1% of the initial investment in its regular premium Offshore Savings Account and single premium pooled fund bond, the Delta Account.
