BNP plans new protected funds for wary clients

LUXEMBOURG Wed Mar 24, 2010 10:31am EDT

LUXEMBOURG (Reuters) - The funds arm of BNP Paribas (BNPP.PA) will launch two new capital protected products this year to meet retail demand as investors tentatively move out of low yielding but safe bank deposits.

Andrea Favaloro, who heads European retail sales at BNP Investment Partners (BNP IP) and Fortis Investments, said the new products would complement two existing products based on European and emerging markets equities.

"It's about planning for investment needs rather than falling in love with a product," he said at the Reuters European Funds Summit.

"We will have a full range of products for those wanting capital protection," Favaloro said.

Fund firms have been hunting for products and strategies which will lure back investors made wary by market volatility over the last three years.

The existing capital-protected STEP products have a total of over 1.4 billion euros ($1.88 billion) under management and Favaloro said the new strategies would allow investors to diversify their portfolios more broadly.

All the strategies will have the UCITS tag, meaning they will be regulated according to common EU rules, and can be sold to retail investors in the European Union and in a number of other markets, including Hong Kong and Singapore.

The EU directives known as UCITS are designed to protect retail investors by setting out stiff liquidity and transparency rules.

Fortis/BNP managers will actively manage the equities exposure within the products, particularly the emerging markets strategy, Favaloro said.

($1=.7439 Euro)

(Reporting by Martin de Sa'Pinto; editing by Simon Jessop)

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