The product will provide small investors exposure to commodities and hedge funds
Most of us have, at times of tumbling equity markets, asked ourselves why the asset manager looking after our hard-earned savings did not get out of the market or move more of the fund's assets into bonds or cash when it seemed so obvious where the stock indices were heading.
Poor decision-making aside, the short answer is that most managed funds, which can invest in a mix of equities, bonds and cash, have set parameters that prevent them from reducing the equity exposure below a certain level.
'All they can do is try and avoid stocks that are likely to go down more. The result is you end up promoting funds by saying this fund manager only lost 20 per cent while the market went down 25 per cent - it doesn't hold much sway,' said Tim Rainsford, general manager of Wilfred T. Fry (Personal Financial Planning), a unit of financial services firm The Fry Group.
With this in mind, The Fry Group is now offering retail investors a portfolio that can switch in and out of the major asset classes virtually without restrictions - a service it believes has been missing in the market place so far. The portfolio will also be able to provide substantial exposure to commodities and alternative investments such as property and hedge funds
'There isn't really anything that compares to this. It is a retail product that does the sort of thing you might expect a private bank to do for a client with a substantial amount of capital,' Mr Rainsford said in an interview with the South China Morning Post.
