The only protected funds available to UK group pension schemes have captured strong performance in their first year, with gains of over 32% locked in.
HSBC's Protected Retirement Funds, which launched on 20 May 2009, are a series of target date funds, which aim to deliver growth from global equity markets with 100% capital protection.
Gains are locked in on a daily basis and investors receive at maturity a value based on the highest unit price achieved whilst exposed to equity markets.
Five protected retirement funds have been launched to date, offering maturity dates between 2020 and 2040. Pension savers would normally invest in the fund which matures before their chosen retirement date.
Rob Pearce, head of workplace retirement services at HSBC, said: “The funds may be suitable for cautious investors who want to invest for their future but also to ensure their hard-earned savings are protected in volatile markets.
"For the more adventurous investor, having a proportion of their pension invested in a protected fund will give them a safety net if markets fall.”
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