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Protected Equities Strategy

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Benefit from the equity market with protection

The Berenberg Protected Equities Strategy invests in equities and utilises options to reduce downside risks while generating attractive returns over the long-term.

The strategy is available to a wide range of investors including pensions funds, family offices and insurance companies. The strategy can also be suitable for investors looking to manage their solvency capital ratios under Solvency II.

What are the benefits for investors?

  • Increased predictability from equity investments

  • Ability to maintain higher and longer-term equity exposure

  • Highly customised solutions available

Properties of the Berenberg Protected Equities Strategy

  • Systematic, transparent, and liquid approach
  • Low transaction costs
  • Incorporates climate change and ESG
  • Flexible protection levels
  • Regions: Global, Regional

Protection levels

The Berenberg Protected Equities Strategy offers levels of protection tailored to investor requirements. An illustration of three possible applications of protection are shown below.

High protection

Targets:
Limitation of the annual drawdown to approx. 10 % p.a., maintain volatility below 10 % p.a., potential equity market participation of approx. 3 % per month

Compared to equities, the strategy is intended to have lower risk and the potential to generate higher returns than global bonds.

Moderate protection

Targets:
Limitation of the annual drawdown to 15 % p.a., volatility of approx. 10 % p.a.



Compared to equities, the strategy is intended to have lower risk and the potential to generate higher returns than mixed funds

Tail risks hedging

Targets:
Limitation of the annual drawdown to approx. 20 % p.a., volatility of approx. 10-15 % p.a., over 90 % participation in positive stock market returns

Compared to equities, the strategy is intended to be lower risk and offer higher returns than equities over the long term through entire market cycles.

What can you expect from the strategy in varying market periods?

Rising equity markets

In rising markets, a positive performance can be expected. The steadier the positive market development, the higher the participation rate.

Flat equity markets

The expected performance should be similar to that of equities. In this scenario, the net effect of the options is expected to be small.

Falling equity markets

The expected performance should exceed that of equities. The extent of risk reduction depends on the hedging level chosen. In general, the larger and faster the losses on the equity markets, the better the performance compared to equities.

Berenberg Protected Equities Strategy at a glance

  • Higher predictability of returns compared to unprotected equities

  • Participation in the upside potential of the equity market

  • Equity selection focused on climate change and ESG

Your Contacts

Philipp Löhrhoff

Philipp Löhrhoff joined Berenberg in 2021 and is a portfolio manager in the Multi Asset team. In his previous roles he worked closely with institutional investors to structure, develop and place bespoke hedging and investment solutions. He is an expert for quantitative investment strategies as well as cross asset solutions with a particular focus on equity and fixed income. He spent several years at Goldman Sachs, BNP Paribas and Natixis in London. Philipp holds a Master‘s degree in Finance and Economics and a Bachelor’s degree in Econometrics and Mathematical Economics from the London School of Economics and Political Science (LSE) and is a CFA chartholder.

Head of Protected Multi Asset Solutions
Phone +44 20 3753-3074
Alina Finkmann

Alina Finkmann, CFA joined Berenberg in January 2018 as product specialist. Since 2020 she heads the multi asset product specialist team. In this function, she is the first contact person for product and client-specific matters for all multi asset and fixed income strategies. Before joining Berenberg, Alina worked as a consultant for the Asset & Wealth Management industry. Alina Finkmann received a Master of Science degree in Business Administration and Finance of the University of Hamburg and a Bachelor of Science degree in Economics of the University of Konstanz. Alina Finkmann is a CFA charter holder.

Head of Product Specialists Multi Asset
Phone +49 69 91 30 90-225

Berenberg Protected Equities Strategy

OpportunitiesRisks
The strategy of equities combined with options enables participation in the upside potential of selected equity markets. The prices of the assets are subject to daily fluctuations and may also decrease.
The strategy has a focus on providing downside protection in falling markets. The performance depends on the general development of the capital market.
Solvency II investors can benefit from the reduction in capital requirements. The targeted reduction in solvency capital ratio requirements cannot be guaranteed.
The investor benefits from attractive risk-adjusted returns The reduction of the equity risk is partly financed by the purchase of call options. In strongly rising stock markets, the performance participation of the strategy may be limited.
The strategy can be customised to meet the individual needs of investors
Equities or Multi Asset

Customised solutions for your portfolio

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Value protection strategy for the multi-asset investment class

A high degree of diversification forms a good foundation but should be complemented by stronger safety mechanisms. With our value protection solutions, we offer multi-asset investors the opportunity to participate in the long-term capital market development whilst achieving pre-defined risk targets.

Our value protection strategy can be integrated into many Berenberg Investment Solutions and can also be incorporated into multi-asset portfolios (including master funds or special fund structures) as an overlay solution.

Important notice: Investing involves risk. The value of investments and the income derived therefrom may fall as well as rise and investors may get back less than the amount invested. Past performance is not an indicator of future returns.