The Importance of Capital Protected Investments in Singapore

Looking for a stable and predictable source of income in today’s volatile financial markets? Consider capital protected investments — a beacon of stability for Singapore investors.

These unique financial instruments provide a much-needed protection from the vagaries of the market. Unlike traditional investment vehicles, where losses are a very real possibility, these products contractually ensure that investors will, at the very least, recover their initial investment amount upon maturity.

In this article, you will learn about capital protected investments. We will define what capital protected investments are, provide examples of them, highlight their benefits, and suggest a plan for investing in these instruments.

What are Capital Protected Investments

Capital-protected investments are financial products that promise to return your principal investment amount in full at maturity, regardless of how the underlying assets perform. These investments are designed to shield investors from the risk of losing their initial capital, making them an attractive option for those seeking to diversify their portfolio.

Imagine capital-protected investments like a seedling planted in a greenhouse. You plant the seed (your principal investment) with the knowledge that the greenhouse (the structure of the investment) will protect it from harsh weather conditions (market volatility).

While the seedling's growth (potential returns) might be limited compared to being planted directly outside, you have the peace of mind of knowing it won't be destroyed by unexpected storms.

Benefits of Capital Protected Investments

Done well, investing can be rewarding. However, worrying about market swings can take the fun out of it. In this regard, capital-protected investments offer a solution for Singaporean investors who prioritise protecting their principal.

#1 Protected Principal, Reduced Stress

Capital protecteded investments shield your initial invested sums from market volatility. You get your principal back in full at maturity, regardless of how the market performs. This provides peace of mind, allowing you to focus on your long-term goals without constant worry of losing money.

#2 Ride Out Economic Storms

Economic downturns can be nerve-wracking for investors. Capital-guaranteed investments act as a reliable haven during these times.

Knowing that your principal is secure allows you to weather economic storms with greater confidence. This feature is especially valuable for those saving for specific goals, like retirement, buying a home, or paying for a university education. In such instances, protecting your capital is crucial.

Choosing the Best Investment Plan with Returns Protected

Convinced about the value of a capital-protected investment plan? Your next question may be this: “How do I choose the right investment plan offering returns?”

Here are some useful points to consider as you shortlist the best guaranteed return investments:

• Principal Protected: This is the core benefit – your initial investment is returned back in full at maturity. Sleep soundly knowing your principal is protected from market fluctuations.
• Returns Protected: For an additional layer of assurance, consider investment plans that offer protected interest returns or tie your returns to market performance, potentially boosting your overall gains.
• Fixed Tenure: Most plans have a set timeframe, giving you a clear picture of your investment horizon. This helps you plan your finances effectively.
• Short-Term Options: Need more flexibility? Some plans offer shorter commitment periods, catering to diverse financial goals.
• Competitive Returns: Look for plans with attractive returns alongside principal protection. Maximise the value of your investment without taking unnecessary risks.
• Monthly Income: Certain plans provide regular payouts, ideal for retirees or those seeking a steady income stream.

BigFundr’s Capital Protected Investments

Focusing on real estate debt investing, BigFundr emerges as a noteworthy player in the realm of capital protected investments. To protect the interests of all investors, it provides multiple layers of guarantee.

This multi-faceted approach to protecting our investor’s funds makes our real estate deals an attractive option for those seeking security and returns in Singapore’s investment landscape.

Here’s how BigFundr’s Multiple Layers of Protection work:

#1 First Legal Charge on Real Estate

In case of a borrower default, BigFundr holds the first legal claim on the underlying property. This allows them to recover your investment by selling the real estate if necessary. Additionally, all loans are secured by real estate, providing an extra layer of security.

To further minimise risk, BigFundr ensures a Loan-to-Value (LTV) ratio capped at 70%, protecting investors from potential property value declines.

#2 Personal Guarantee by the Borrower

BigFundr goes beyond recovering your funds from selling real estate. An added layer of security comes from how our contracts weave in personal liability from the borrower. This means if the borrower defaults and the property sale doesn't fully cover the loan, BigFundr can seek repayment directly from the borrower.

#3 Buy-Back Provision by Fund Management Companies

BigFundr partners with established Fund Management Companies that manage billions of dollars in loans. These companies are obliged to buy back the loan notes at a predetermined time, offering an additional layer of protection.

#4 Principal and Interest Protection

For ultimate peace of mind, BigFundr provides additional principal and interest protection through Maxi-Cash*. This legally binding contract ensures that Maxi-Cash* will step in and repay your principal and interest directly if the borrower defaults.

To explore how BigFundr’s capital protected investments can fit into your financial plans, visit our homepage or get in touch with us to learn more.

Conclusion

In conclusion, capital protected investments serve as a cornerstone for cautious investors in Singapore, providing a blend of security and potential returns. With offerings like BigFundr, investors now have sophisticated options that align with their risk appetite and financial goals, ensuring peace of mind amidst the unpredictability of markets.

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