The Glacier Sustainable World Enhancer
The first issue of the Glacier Sustainable World Enhancer in 2021 will be open to investments from 6 April 2021 to 19 May 2021. We believe this solution has a valuable role to play in the portfolios of more cautious investors.
We have kept the features the same as with previous issues, i.e. it remains the solution intermediaries and investors are familiar with - a five-year, tax-efficient, structured investment that lets investors grow their capital with the certainty of capital protection, while also letting them contribute to global sustainable development goals. It is set up in the Glacier Vantage Plan (a sinking fund policy underwritten by Sanlam Life Insurance Limited). We’ve also kept the indicative participation level at 400% (4 times) the return of the global portfolio (dependant on market pricing at inception date).
Why use the Glacier Sustainable World Enhancer?
The COVID-19 pandemic has affected markets and economies immeasurably over the past year, with many job losses as well as employed people drawing a reduced income. At the same time, we’ve also seen that those who remained employed, saved more over the last year, and we now see many people with a considerable amount in cash.
While the tendency to want to save more and build up an emergency fund – in response to recent events – can be applauded, investors could be earning a better return elsewhere without taking on significant risk with their capital. Provided they have an emergency fund in place, and a certain amount of liquidity available to them, they could then start to consider an investment plan and an endowment/sinking fund, both of which require longer investment time horizons. The investment plan allows for liquidity in the portfolio while the Glacier Sustainable World Enhancer - with its five-year term - offers the opportunity for growth, while still protecting capital as well.
The Glacier Sustainable World Enhancer’s role in a diversified portfolio
There are a number of reasons to consider the Glacier Sustainable World Enhancer, including:
• Access to sustainable global equities, together with capital protection
• Benefits of a sinking fund structure, including tax efficiency
• Opportunity for enhanced returns. The Glacier Sustainable World Enhancer, with its asymmetric return profile, offers the potential to share in the upside with no downside (due to the capital protection). It gives investors the opportunity to diversify their portfolio while reducing overall risk.
Positioning the Glacier Sustainable World Enhancer
In addition to the above advantages, the more cautious investor would obtain peace of mind from the Glacier Sustainable World Enhancer in the following ways:
• The Solactive Sustainable Development Goals World RC 8 EUR Index limits volatility to 8% - suited to a more cautious risk profile.
• There is no currency risk – the investor invests in rand and receives returns in rand.
• Their capital is protected, with the guarantee provided by a leading global bank. Important to note is that all fees (including the 3% initial intermediary fee) have been allowed for and will not further reduce the maturity value of the investment.
Investors receive the above benefits while at the same time being able to maintain, and grow, the value of their investment – which may not be the case with cash in a bank account. It could even be a way to protect a portion of their capital in the lead-up to retirement.
Glacier Financial Solutions (Pty) Ltd and Sanlam Life Insurance Ltd are licensed financial services providers
The Glacier Sustainable World Enhancer is set up in a sinking fund policy underwritten by Sanlam Life Insurance Limited
