Investment objective and policy
The Sub-Fund will seek to achieve its capital appreciation objective by investing in a diversified multi-asset portfolio composed of:
The Sub-Fund will adopt a strategy that rebalances the investment allocation between the “Dynamic” and “Protection” portfolios, according to the TIPP (“Time Invariant Portfolio Protection”) methodology which aims at limiting the maximum decrease in value of the Sub-Fund so that it does not exceed 20%.
The TIPP methodology dictates the maximum allowed allocation of the Sub-Fund’s assets to the Dynamic Portfolio on each Business Day. Assets not allocated to the Dynamic Portfolio are invested in the Protection Portfolio. Under the circumstances that the Dynamic Portfolio experiences a substantial drawdown, the proportion allocated to the Dynamic Portfolio as per the TIPP methodology could potentially become zero and consequently the entire assets of the Sub-Fund will be invested in the Protection Portfolio. Such event is called a “Cash-Lock Event” and when this happens in a negative money-market environment, the Sub-Fund can no longer invest in the Dynamic Portfolio and benefit from a market recovery. In order to mitigate the Cash-Lock risk, the Sub-Fund can temporarily lower the allocation to the Dynamic Portfolio below the maximum allowed by the TIPP methodology or even temporarily zero the allocation to the Dynamic Portfolio, based on equity market volatility indicators.
The above TIPP rebalancing mechanism is sufficient to achieve the objective of limiting the maximum decrease in value of the Sub-Fund under normal market conditions but could fall short of its objective if there is an extreme and sudden drop in the markets where the Dynamic Portfolio is exposed to. In order to offer protection even under such extreme market conditions, the Sub-Fund will also be exposed to an OTC Put Option, with Barclays Bank Ireland (the “.Guarantor”). The details of this protection are described in the “Capital Protection” section.
Barclays Bank PLC, has been selected as “Allocation Agent” to provide operational support to the Guarantor and Investment Manager in relation to the implementation of the TIPP methodology; the Allocation Agent will perform the following daily tasks:
Liquidities and other financial derivative instruments may be used within the limits described in sections 3.1. and 4. of the Prospectus.
Profile of investors
The Sub-Fund has a medium risk profile and is addressed to investors seeking returns from a widely diversified portfolio whose assets are invested in units of UCITS (multi-manager) and/or UCITS compliant ETFs, with various asset classes (multi-asset) and investment objectives and aim to benefit from their active management.
|MONTHLY PERFORMANCE SCENARIO|
|PRIIP Eurobank (LF) Fund of Funds – Global Protect 80|