By Estee Sevenster, Senior Actuary at Discovery Invest
The ongoing geopolitical issues, global economic volatility and persistent inflation present a test to the principle of “safe havens” in investment markets. The world witnessed declines in both equity and fixed income investments in 2022, something we have not seen since 1969. This year we have seen a recovery in global equity markets, however, the JSE is still down year to date. Local and global bond markets have recovered somewhat from 2022 but have not provided the returns initially expected for 2023.
In this context, while advice about diversifying to non-correlated assets is still valid, some investors are starting to question the appropriateness of traditional diversification strategies. It is the prerogative of advisers to start exposing and educating their clients to other products and portfolios that could offer opportunities for enhanced returns and diversification.
Product providers must also be innovative because recent developments require them to think differently about where to generate returns for investors. Discovery Invest has always been at the forefront of innovation and has launched many structured products over the years. Structured products are well suited to volatile market conditions as they offer a blend of risk protection against the markets falling, while also giving investors attractive returns when markets perform. Regardless of the pay-off profile, structured products are designed to complement diversified investment portfolios as they often offer investors exposure to different asset classes, geographies, and currencies.
Our well-known and extremely popular, Discovery Capital 200+ structured product pays investors 100% gross return on investment after five years if the underlying global share portfolio is flat or positive. Investors will also have peace of mind from the downside protection offered, where they will receive their initial capital back if the underlying global share portfolio provides a negative return however, the downside protection falls away if the global share portfolio falls by more than 30% during the five-year period. All returns and downside protection mentioned is before the effect of fees and taxes.
These products give investors exposure to equity markets in Europe and the United States as the underlying global share portfolio comprises 20 quality European and US companies.
FROM EMERGENCY EVENTS TO CLAIM FACILITATION, WE’VE GOT YOU COVERED.
Eliminate your clients’ hassles and stress when an emergency, risk, and claims event occurs with Global Choices’ 24hour omni-channel digital solutions, elevating your body corporate, community schemes, and members precisely when they need it the most.
Prioritise superior your customer service and enhance user satisfaction with our comprehensive and streamlined solutions.
Global Choices Lifestyle is an
AuthorisedFinancial Services Provider – FSP #44544
We currently have 11 open tranches of this structured note as well as six tranches that have already matured. Of the 11 open tranches, nine are currently in line to give investors 100% return.
In terms of those already matured, investors in five out of the six tranches received 100% return on their investment over the five-year period, before fees and taxes, outperforming over 99% of all listed funds in South Africa. The March 2015 tranche, which matured in the height of the COVID-19 crisis (March 2020), provided investors with much needed downside protection.
We have also recently launched a new and enhanced version of this popular structured note, the Discovery Capital 200|300+. The Discovery Capital 200|300+ products pay 100% gross return on investment after five years if the underlying global share portfolio return is flat or positive over the five-year period. Now in addition to this, if the global share portfolio grows by 40% or more over the same period, investors will get an extra 100% growth! Investors also get downside protection if the global share portfolio falls by up to 30%.
We currently have two open tranches of the Discovery Capital 200|300+, the April and July 2023 tranches, and they are both currently in line to give investors a 100% return before the effect of fees and taxes. Our most recent tranche, the November 2023 tranche is still open for investment until the 20th of November 2023 or until capacity runs out.