View more on these topics

&#39Market miracle&#39 needed to help bond investors?

I was interested to read the article “Bond investors need a &#39market miracle&#39” (MM, June 20). Clearly, all investors are rightly sensitive as a result of the huge drop in world stockmarkets but I would make the following observations:

•Eurolife does not give financial advice. In addition, we go to great lengths to explain all aspects of the investment within our brochures. We recommend people seek professional independent advice and only market our plans via IFAs as we believe this type of investment should be matched to the client&#39s risk profile.

•It seems to be the norm when looking at structured products to focus solely on the capital loss incurred without taking into account either the income or growth elements – why? We believe in order to compare structured plans with other investments it is essential to look at the overall “return” rather than just the capital position.

•We recently had a FTSE 100 Pep plan mature. This was mentioned in the Chartwell report, which stated that investors lost 18 per cent of their capital. Whilst this is correct, with the growth element of 26 per cent added the overall return was 8 per cent. We believe that this compares favourably with a direct investment in the FTSE through a tracker fund, where the investor would have lost at least 10 per cent over the same time period.

•The plan referred to in the article matures in April 2004. We believe to say “it is on course for a 67 per cent loss” ignores guaranteed growth/ income – as well as any future increase in equity markets.

•The losses referred to are not unique to the structured investment market. The current market conditions affect all equity-based investments.

We are as concerned as our investors regarding the losses that have and could occur in the future on some structured products. It is with this in mind we feel it is essential to improve the understanding of structured investments and welcome the input of the regulators, IFAs, investors and, of course, Money Marketing in helping us achieve this goal.

If you could assist us in getting the returns aspect put on to a level playing field that would be a good start. In the meantime, let us hope that current depressed state of the stockmarkets soon lifts.

Graham Devile

Director, Eurolife Fund Managers, London

Recommended

IFAP highlights £315m wasted by non-taxpayers

IFA Promotion says 5.1 million non-taxpayers would each save an average of £62 if they registered their status with the Inland Revenue.The savings amount to a total of £315m. IFAP says non-taxpayers, including low earners, can obtain form R85 from their IFA, bank or building society to inform the Revenue of their situation.Once the Revenue […]

Criticism of changes to tables

The FSA&#39s league tables should be changed to illustrate the differences in costs between going to an IFA and other distribution channels according to review chief Ron Sandler.The league tables, which have been pilloried in the past for their over-reliance on charges, would effectively be split showing two prices one for IFAs and one for […]

Sandler stockmarket announcement tomorrow morning

Tuesday&#39s publication of Ron Sandler&#39s review into medium and long term savings will be kicked off with a stockmarket announcement at 7am tomorrow morning. It will then be followed by a press briefing at 11am when the full text of the report will be available.

T&G makes Sipp debut

Teather & Greenwood Investment Management TGIM SIPP Type: Full Sipp Minimum investment: Lump sum £75,000 Investment choice: All Inland Revenue permitted investments Administrator: Wolanski & Co Trustees Charges: Initial £350, annual £400 Commission: Subject to negotiation Tel: 020 7426 9003 The panel: Ian Anderson, Director, Silvesters, Bob Lawrence, pensions director, Duncan Clarke, Mike Humble, Regional […]

Large-cap growth alpha thesis: seeking risk-adjusted excess returns

Content supplied by Loomis, Sayles & Company — an affiliate of Natixis Global Asset Management For mutual fund investors and managers of large pensions or endowments, a major challenge is to identify those portfolio managers who are most likely to deliver superior risk-adjusted returns in the future. Understanding how an investment philosophy informs a manager’s decision […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment