Scottish Capital Protected Funds have local agents

Quest Investment Services Ltd of Sliema, a licensed independent financial advisory firm, have been appointed local agents for the Scottish Capital Protected Funds in Malta.

Scottish Capital Protected Funds were launched last week at the Victoria Hotel, Sliema. They are designed to track the performance of any of the five major stock market indices: the FTSE 100, S&P 500, Euro Stoxx 50, Nikkei 225 and NASDAQ 100, and in three major currencies, the US dollar, sterling or euro.

Besides offering a choice of protection levels, the funds allow for either redemption or simple renewal, on a three-monthly basis at no charge. Other protected funds normally tie in the investor's capital for periods of three to five years. These funds give the investor the peace of mind, flexibility and liquidity to cash in or be invested for further quarters.

With a choice of three protective levels on the invested capital, 100%, 97.5% or 95% protection, the funds could appeal to both the cautious as well as the more speculative investor. While a 97.5% or 95% protection level limits a potential loss to maximum of 2.5% or 5% respectively, a 100% protection level would offer full protection to the investor's capital in the event of a stock market decline.

The minimum initial investment in each sub-fund is $8,000, £5,000 or €8,000. There is no maximum. The investor may make additional investments at any time subject to a minimum of $4,000, £2,500 or €4,000 per investment.

To further enhance the funds' flexibility and to further underscore the unique features of the funds, the investor may, on a quarterly basis, either redeem all or part of their investment, or simply roll over for a further three months, making the necessary switches in indices and/or protection level if so required.

Set up three years ago, Quest aims to provide turnkey investment services solutions while offering independent investment advice with the capacity of executing on a wide range of investment products both locally and internationally.

Neil Lovatt, director of marketing at Scottish Capital Protected Funds, told The Sunday Times last week that it was thanks to its good relations with Quest that it decided to appoint them local agents.

"We regard them as professional people with a detailed knowledge of the market," Mr Lovatt said. Asked whether equities were a good 'bet' in these trying times, he said it was never possible to call the market. There has been a continual dip.

The Scottish Capital Protected Funds allow investors to go into the market with some investment with the benefit of as much capital protection as they wished.

"We have had a positive reaction to these funds," Mr Lovatt said. "The main benefit I see is that it gives investors real control over their capital. This is fundamental because in a bear market investors do not just worry but they fear that they will lose control of the value of their investment."

The last years of stock market activity have not been very rewarding to the average investor; in fact many stock market investors have seen and witnessed the scarring effect a bear market could have on their investment portfolios and wealth in general.

This has caused investors to sell in panic or shift their assets to safer havens, such as bank deposits as well as local and international bond markets. With the stock markets, now reaching levels that have not been witnessed since the early to mid Nineties, investors are slowly rethinking their investment portfolios back into the equity markets due to an over priced bond market and low interest rates achievable on bank deposits. Although volatile, an investment in the equity market over the long term has proven to be one of the most rewarding returns on capital.

With the advent of capital protected funds, investing in the equity market has been made easier as it removes any downside risk from profiting from the stock market. These funds would appeal to the risk averse investor as these sophisticated funds allow the investor to participate in any potential gains achievable from the stock market while still protecting capital in the event of any declines.

Due to this risk averse attitude, Quest Investment Services has geared itself to providing these opportunities to the local market through this unique range of sub-funds offered by the Scottish Capital Protected Funds.

The funds may appeal to anyone who is concerned about protecting assets against the risks of inflation. In addition, investors who have built up their investments over a number of years and might favour protected products as a means to protect their capital, with the possibility of some upside. Protected equity funds may also be incorporated into a diversified portfolio, thus asset allocating between cash, bonds and equities.

Investment in the funds should be made on full details of the scheme particulars available from Quest Investment Services Ltd. The funds are structured to protect capital invested against negative market movement.

The initial investment is protected and not guaranteed, and would be at risk in the event that any financial institution or bank with whom the fund manager has placed funds will not be able to meet their obligations.