Schroders predicts increased appetite for structured mutual funds

Derivative funds and capital-protected hedge funds to heal the wounds of mutual fund investors, says product head John McLaughlin.

The spate of new capital guarantee and return guarantee funds being launched in Asia will soon be followed by more sophisticated structured products promising higher absolute returns, says John McLaughlin, head of Schroders structured investment team based in London.

On a visit to Hong Kong to launch Schroders' own three-year guaranteed return fund, McLaughlin predicted that Asia will follow in the footsteps of the US and Europe. Retail investors on both continents are now dabbling in derivatives, having moved on from buying into funds with a core investment in equity and a capital guaranteed overlay.

In Asia, where mutual fund investors have suffered bad returns for the past five years, these products...

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