Model portfolio solution (MPS) specialist 8AM Global has launched a capital-protected investment solution for advisers, in partnership with structured product provider IDAD.

The investment solution, AQ Protected (AQP), looks to combine the growth potential of an actively managed model portfolio with 100 per cent capital protection.

It has been designed for investors seeking equity-style returns alongside cash-like risk, with 8AM Global saying it was particularly suited for client segments saving to meet future liabilities.

These segments included those five to 10 years from retirement looking to protect accumulated gains, retirees managing sequencing risk in drawdown, and trustees or fiduciaries with capital preservation duties.

8AM Global suggested that AQP should be used to ring-fence a five-year bucket for future withdrawals for clients in drawdown, creating a ladder of protected maturities that can be rolled forward each year.

It said the five-year product offered investors full capital protection at maturity while providing exposure to potential returns of up to 40 per cent, with the capital secured by Goldman Sachs.

AQP has been linked to 8AM Global’s AQ Global 60 portfolio, which has 60 per cent equity exposure through a mix of global equity and bond funds.

Goldman Sachs manages a daily volatility control mechanism that is incorporated into the product, adjusting portfolio exposure between 0 per cent and 150 per cent to target 10 per cent volatility.

"Traditional MPS’s can feel very exposed for pre-retirees or those in drawdown, particularly after recent strong market gains,” said 8AM Global head of distribution, Paul Hogg.

“AQP gives advisers a tool to keep clients invested for growth while removing the fear of capital loss that can derail financial plans."

IDAD managing director, Clive Moore, added: “Investors have had a great couple of years, in particular recovering losses from 2022, but there’s a lot of nervousness out there at the moment and advisers tell us they want solutions that can ‘bank’ the gains at the same time as keeping invested if markets continue to run hot – AQP does exactly that.”

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