Defined return investing has grown in popularity with many investors as a means of providing more predictable equity-linked returns in an unpredictable world.
The Causeway Defined Growth Fund aims to generate an annualised return of 7% per annum over the medium to long term, with reduced sensitivity to falls in global equity markets. To achieve this, the Fund holds a portfolio of financial instruments linked to major equity indices. Each instrument is designed to generate a pre-defined level of return if the linked equity indices move sideways, upwards or moderately downwards.
Unlike most long-only equity investments, the instruments continue to accumulate potential returns during periods of equity market volatility. This unique characteristic can result in outperformance of global equities over the medium to long term.
To minimise the counterparty risk and liquidity risk often associated with defined return investing, all instruments in the Fund portfolio are backed by G7 Government Bonds, providing unrivalled security for this type of investment.
For investors requiring a regular income from their savings, the Fund also has an income-paying share class which pays quarterly distributions out of the capital growth.
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