Investments  

Product review: Sanlam P2strategies fund range

The Sanlam P2strategies range includes funds based on global, North America, emerging markets, UK and Europe excluding UK.

P2strategies is an investment solution designed by Sanlam to help manage the risk of investing in equities.

An allocation is made into equity funds and the balance is put into a ‘P2account’. This value is designed to move in the opposite direction to the funds, which is intended to reduce the impact if the markets sharply fall.

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No matter how the funds are accessed, the theory and basic mechanics remain the same. Short futures contracts are purchased according to equity exposure and various economic factors.

Previously only available in the UK through Sanlam’s offshore bond, the new range has been extended for UK retail investors.

The UK-focused fund, for example, aims to provide long-term capital growth through exposure to world equity markets. It uses the risk management strategy to reduce volatility and minimise losses in declining markets.

Equity exposure in the fund is achieved through investing in the Sanlam UK Equity Tracker fund, which tracks the MSCI UK Daily Net Total Return index.

The minimum investment of £1,000 and the annual management charge of 0.75 per cent is consistent across all five of the funds.

www.p2strategies.com

Comment

Short futures contracts are designed to make investments safer but they add in a level of complexity that can be off-putting and, some might argue, unnecessary.

The principal issue with these funds is that, on paper, they appear to be little more than tracker funds and yet command a 0.75 per cent management charge. A charge in this region would be cheap for an actively managed fund, but in this instance it appears to be paying for the active management of a passive fund.

The literature provided by Sanlam itself states that the fund suite’s purpose is to encourage long-term investment by creating confidence: essentially any advantage is an illusion. It is a hefty charge to get the same results as a tracker, with the only thing being offered in return a smoother route to those same results.