What we mean by ‘deliberately defensive’

We describe our product suite as ‘deliberately defensive’ – but what do we mean:

  • Issuer / counterparty risk:

As an independent plan manager, able to deal with any issuer / counterparty, we seek to identify and deal with strong issuers / counterparties. We deal predominantly with banking groups which are regulatorily identified as Global Systemically Important Banks (‘G-SIB’s) or, as a minimum, Domestic Systemically Important Banks (‘D-SIB’s).

G-SIBs are fundamentally more important (usually bigger and stronger) banks, in a country / region / globally: as a result, they are subject to more stringent regulatory requirements, including higher Tier 1 capital ratios.

  • Market risk:

Our core products are designed to address both ‘upside’ and ‘downside’ market risk. Our core products are designed so that they are able to generate some or all of their potential returns without requiring the stock market index to which they are linked to rise (mitigating the ‘upside market risk’), while including a defined level of protection should the stock market fall (mitigating the ‘downside market risk’).

Our core products have deep end-of-term (only observed at the end date / maturity) barrier levels, which reduces market downside risk, as well as being easier for investors to understand.

Our core products are single index only

  • Operational risk (plan manager / administration and custody):

We benefit from being part of the Alpha Real Capital family of companies.

We seek to mitigate the plan manager and administration / custody risk of our products throughout their term.