Our core products are ‘Deliberately Defensive’
In line with the philosophy of Alpha Real Capital, we are committed to making lower risk products the calling card that we build our business and reputation upon.
Our core products are designed to increase the likelihood of positive returns, while also decreasing the likelihood of loss of capital. To us, that is the basic purpose of a good investment company and a basic principle of a good investment strategy. We call our core product range ‘Deliberately Defensive’.
But what do we mean by ‘Deliberately Defensive’?
- Issuer / counterparty risk: Firstly, we deal predominantly with issuers that are defined for regulatory purposes as ‘Global Systemically Important Banks’ (G-SIBs) and/or, as a minimum, ‘Domestic Systemically Important Banks’ (D-SIBs). We also use our Issuer & Counterparty Scorecards (‘TICS’) to aid objective consideration of financial strength and credit risk, based upon multiple factors (we publish our Scorecards for professional advisers).
- Market risk: Secondly, our core products are all designed so that they are able to generate some or all of their potential returns without requiring the stock market to rise, while also providing protection from a defined level of risk should the stock market fall. Our core products are also single index only – and use deep end-of-term barriers.
- Operational risk: Thirdly, as a wholly owned subsidiary of Alpha Real Capital, the operational strength of the group supports us in our role as plan manager. We have also taken steps to address and mitigate administration and custody arrangement risks, over the investment term of our products.
Importantly, we think professional advisers should be more carefully considering the ‘operational risks’ of structured products, in terms of identifying and assessing the strength of the plan manager and their administration and custody arrangements (and we note that regulations (PROD Sourcebook) state that distributors should consider the impact that the selection of a manufacturer could have on clients, in terms of various factors, including the financial strength of the manufacturer).
We think that our core products can meet the interests and needs of many professionally advised investors, investing as part of a diversified and balanced portfolio, regardless of their level of wealth.