Speaking at a luncheon in Sydney yesterday, Perennial Value portfolio manager and managing director John Murray said that the fund is a “solution to suit the times”.
The fund aims to enhance long-term performance outcomes by maximising returns when markets rally and cushioning the magnitude of significant losses when markets fall, a Wealth Defender Equities issued statement said.
“[The fund] has the objective of delivering the upside of an investment in Australian equities, while efficiently and cost-effectively managing the downside risks in equity portfolios,” Mr Murray said.
“If markets fall, we want to give our investors a slightly better experience than they would have otherwise had with a standard portfolio of equity securities,” Perennial Value portfolio manager Dan Bosscher said.
Mr Bosscher argued that the level of protection will vary depending on conditions, but the investment budget will incorporate one per cent to two per cent in order to protect against market downturns.
According to Perennial Value, stocks will be selected for the fund with the aim of capital protection, a gross dividend yield focus, and strong mid-cap bias.
Mr Murray concluded that the Wealth Defender Equities Fund is a response by fund managers who are now reacting to investors' needs.
“Investors today are confronted by a convergence of unique challenges: increasing uncertainty in global economies and financial markets, domestic rebalancing of the Australian economy and a corresponding downward trend in official cash rates,” a Wealth Defender fund statement said.
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