Making these products available through the Momentum Wealth Platform means that "for the first time in South Africa two Absa products, a diversified commodity and a global developed equity product, are easily available to the average adviser or investor," said Ryan Sydow, head of Retail Distribution at Absa.
Given that most cautious portfolios should contain 22% foreign equities and most balanced portfolios 24% foreign equities (Absa Wealth's current asset allocation view), the Global Equity Protector provides local advisers and investors, most of whom are underweight offshore equities, a long overdue opportunity to safely up weight the foreign equity content of their portfolios.
Similarly, most cautious portfolios should contain 3-5% commodities and most balanced portfolios 5-8% commodities. As such, Absa's Diversified Commodity Protector, which guarantees a minimum return, provides South African investors a safe platform on which to access commodity investments and diversify portfolios. This is quite different to having equity in commodity linked companies, like BHP Billiton, which offer different risks and benefits.
"Both the Diversified Commodity Protector and the Global Equity Protector are targeted at the discerning customer looking for long-term investments offering low risk with potential for high yield, whilst providing diversification into assets traditionally quite difficult for South African investors to access," said Sydow.
The Diversified Commodity Protector offers commodity exposure, the benefits of portfolio diversification and the potential for above-inflation returns, all with the comfort of a minimum return of at least 15% at the end of the term - with the potential for much higher returns through a 100% participation in any basket growth.
The Global Equity Protector on the other hand offers offshore exposure to high quality stocks without the customer having to use their offshore allowance - or take on exchange rate risks.
Absa's Global Equity Protector is a South African rand denominated investment designed to provide investors with access to a diverse range of offshore equities with uncapped upside potential and full capital protection. The investment is designed to provide investors with more than 100% participation in any growth in the Barclays Black Chip Price Return Index, as measured between the investment start date and maturing date. By referencing the Barclays Index, Absa is able to focus the very best the Group has to offer. By using a 'smart Index' Absa also brings the latest trend in smart beta globally to South African investors for investments of as little as R50,000.
"Momentum Wealth Platform was chosen given its strong position in the independent financial adviser market and because it is one of Absa's key partners in the investment space," concluded Sydow.
