Super investors should consider capital protected growth funds – ING
People investing large, one-off un-deducted contributions into super before the June 30 transition deadline should consider new-style capital protected growth products, according to David Kan, ING’s head of product and strategy, personal investments.
Kan said products such as ING’s Protected Growth Fund, launched in December last year, offered investors capital growth in rising investment markets, with downside protection in falling markets.
“Given the increasing time people spend in retirement, many people investing a major one-off un-deducted contribution into their super in next few months would want a fair proportion in growth assets for the long term,” he said.
An alternative for these investors would be to “protect their capital by simply putting it in cash or fixed interest investments, which would then create another problem.
“If the market takes off on another run — at what point do they shift into growth assets?”
In this scenario, he said, many people will “maintain an over-allocation to income investments because they are too concerned to shift into growth assets, which defeats the purpose of the investment.”
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