With-profits ' a flawedasset class

With-profits funds have lost their shine since the onset of the bear market and investors should now be looking for more transparent and simple vehicles such as cautious managed in which to invest

If unfettered optimism was the rallying cry of the closing years of the 1990s, caution has become the watchword of the new millennium. Tumbling equity markets have caused severe problems in the financial services industry. Investment products that looked ideal in bull markets, like split-capital trusts, have shown disturbing flaws under the pressure of falling returns. However, perhaps the most worrying development is the problems faced by with-profits funds and their providers. With-profit bonds have been a staple product of small investors' portfolios for decades. The intermediary ma...