Janus launced new fund which uses insurance product to guarantee 80% of peak NAV.
Current ER is 1.64%.
JPGDX
Capital Protection Fee at a maximum annual rate of 0.75%. Because the Capital Protection Fee is based on the aggregate protected assets of the Fund rather than on the Fund's total net assets, it can fluctuate between 0.60% and 0.75%, thereby resulting in the expense limit fluctuating between 1.38% and 1.53%.
Annuity type products are usually a bad deal for investors, so it the same true for this fund?
Comments
I have not read thru the prospectus; but if this fund and similar were an offering of my company, I know that my bean counters and the math computers would have figured every angle to protect me (the company), too.
I also presume there must be an insurance product behind this for the protection.
This is all well and good in "normal" times; but I do believe that a worse case scenario would put on in a long line for a payout of any insurance product.
I tracked the actions of a very large insurance company during the financial melt that holds many investment portfolios. This company was able to purchase (at the very last days) a small/failing savings & loan so that the ins. co. could be elegible for TARP/TALF monies from the Fed. programs; as the ins. co. had its monetary fanny hanging out to far and continued and a deeper economic problem during the 2008/2009 would have placed them and their customer base in peril with the lack of an ability to pay acct holders.
I am sure the prospectus only contains language to the effect that none of one's monies is "really" guaranteed by anything but full faith and credit on the ability of the company(s) to honor the return of invested monies.
There are those who will point out similar protections for any insurance products via state mandates. This may indeed be true; but had the 2008 melt gone further down hill; most insurance product holders would still be in line to get "their" money.
Last week, Prudential had its first customer (I recall a pension program) in Floride with some similar "guarantee" via a "product". Related somewhat to this is a recent report that annuity sales are up some 34% or there abouts this past 12 months. The market melt has been a large blessing for those in the insurance products business.
My two cents worth on a one cup of coffee start.
OUR house will continue to attempt our own downside risk/guarantee program through knowledge.
Thank you for the post...........always some interesting products coming to the market, eh???
Regards,
Catch