Capital Protection
Last updated
Was this helpful?
Last updated
Was this helpful?
Capital Protection
The CPPI is a type of portfolio insurance in which the investor sets a floor on the percentage value of their portfolio, then structures the asset allocation around this condition. Our CPPI module offers the possibility of protecting your capital, thus adding an additional layer of security to your systematic portfolio management strategies.
The CPPI allows an investor to maintain exposure to the potential upside of risky assets while providing a capital guarantee against downside risk. To guarantee the invested capital, a position in dollars is maintained, in addition to the basket of assets that make up the performance driver.
Risk Minimization : By setting a floor for the portfolio value, investors can be assured that even in the case of unfavorable market movements, their portfolio's value will not fall below a certain level.
Growth Potential : While capital protection can help minimize losses, it does not limit the potential for gain. If the risky assets in the portfolio increase in value, the portfolio will benefit from this growth. This offers a balance between security and potential for return.
