Glacier Capital Enhancer – providing more certainty in unpredictable times

Following the success of the first issue and the continuing market uncertainty, Glacier has launched the second issue of its Capital Enhancer.

The solution is a tax-efficient investment linked to the performance of a global portfolio, and offers capital protection as well as an enhanced return with uncapped upside.

Addressing investors’ concerns

The risk of losing capital on an investment is a big concern for investors. The Glacier Capital Enhancer addresses this fear by providing a guarantee on an investor’s gross investment amount. By combining the Capital Enhancer with an investment that provides a guaranteed return, investors can also secure a minimum return with uncapped upside potential.

Enhanced returns

The five-year investment offers the opportunity for high after-tax returns (effective rate of return of 10.6% after tax and fees, per year), even in low growth markets. This possibility to earn equity-like returns, while taking on very little risk goes against the typical risk return framework and enhances the overall risk-return profile of a portfolio.

The capital protection and investment return are provided by leading global banks. With a greater awareness of credit ratings following recent downgrades, only banks with a Fitch long-term credit rating of at least A+ will be selected.

Exposure to global equity markets

The Capital Enhancer provides exposure to a diversified portfolio of global blue chip stocks through the Euro Stoxx 50 and FTSE 100 price indices. Guarantees are provided in rands, removing any currency risk and the additional uncertainty and volatility that is typically associated with offshore investing.

The FTSE 100 remains robust and well diversified in the face of ongoing uncertainty regarding the hung parliament and Brexit negotiations going forward. This was evident just after the election results were released. The index is therefore a good hedge against ongoing uncertainty. However, a possible hawkish stance from the Bank of England and a subsequent tightening of the monetary policy in the UK may prove to be a headwind in terms of this index’s performance.

The outlook for European equity returns remains positive on the back of improving economic conditions, higher global growth, a stabilising political environment and improvements in company earnings.

Globally, tighter monetary policies may add to the tailwind of both indices. However, while the threat of deflation may have disappeared, it remains to be seen if meaningful upward pressure on inflation will materialise, calling into question the severity of tighter monetary policies.

Based on the reference index of 30% FTSE 100 and 70% Euro Stoxx 50, the outlook for returns therefore remains upbeat, and well positioned away from local political and economic risks.

Opportunity not to be missed

The Capital Enhancer investment option addresses the need for investors to have exposure to these equity markets - allowing them to access competitive real returns and an opportunity to diversify their portfolio with more offshore exposure. With a full capital guarantee provided by a leading global bank as well as uncapped upside potential, this investment opportunity is not to be missed.

The offer closes on 18 August 2017, or sooner if full capacity is reached before that date.