Perennial Value Wealth Defender gains independent validation as advisers stay wary of equity market volatilty


The intuitive logic of Australasia’s only ‘share fund with an airbag’ has resonated strongly with financial advisers while achieving early independent recognition for its innovative product design.

The product seeks to dynamically safeguard investors against large downside losses while allowing for full participation in domestic equity market gains. It provides investors with a bottom-up, Australian equities portfolio comprised of large and small cap listed companies and uses equity derivatives and cash to dynamically protect the portfolio through market cycles, thereby reducing the magnitude of significant negative returns as they occur.

Called the Perennial Value Wealth Defender Australian Shares Trust, the fund was launched by Perennial Value Management Limited (Perennial Value) in late May 2014. It has subsequently secured a Recommended rating from independent investment research firm Zenith Investment Partners.

Head of Retail Funds Management for Perennial, Brian Thomas said the Zenith rating was a welcome independent validation for the fund. The fund has also resonated strongly with financial advisers in the days since its retail launch.

“The stark reality we all faced during the GFC was that a 50% fall in our share values required a 100% future return to get back to pre GFC levels, and investors are expecting further volatility in the future. According to recent Investment Trends research, 91% of financial advisers are expecting two or more market crashes in the next 20 years and the investors we speak to have similar outlooks, ” Mr Thomas said.

“We believe Perennial Value has created an innovative product that is purpose built for the needs of investors and it brings a unique and dynamic approach to managing downside risk.”

“The fund’s unique design and underlying protection process is unlike anything available to Australian retail investors to date,” he said. Mr Thomas said Perennial Value’s considerable investment management expertise (led by renowned value investor John Murray) coupled with its dynamic portfolio protection strategies adds a new dimension to the management of market volatility on behalf of investors. The fund’s dynamic portfolio protection strategies are managed by Perennial Value’s Dan Bosscher.

Zenith’s report said the fund: “…provides investors with a unique exposure to Australian equities which is intuitively appealing. Through the use of dynamic protection strategies, the fund aims to create an asymmetric return/risk profile that is designed to reduce losses in market downturns by approximately 50 per cent whilst allowing for full participation in market upswings. Zenith believes the fund is an innovative product managed by a highly capable risk expert in Dan Bosscher.”

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