View more on these topics

Abbey grows again

Abbey for Intermediaries is offering IFAs and their clients a second issue of the Abbey growth options plan.

This is a guaranteed equity bond linked to the performance of the FTSE 100 index for a six-year term. It has two options that investors can choose. Under option one, investors get all the average growth in the index up to a maximum of 56 per cent. This is calculated by comparing the closing value of the index on November 12, 2004 with an average produced over the final 12 months of the term.

Investors will benefit from a full capital return regardless of the performance of the index and there is also a lock-in feature. This will protect the first 28 per cent growth in the index, which means if the index ever rises by 28 per cent at any point during the term, investors will get 28 per cent growth on top of their capital return regardless of any subsequent movement in the index.

Option two differs in that there is no lock-in feature &#45 investors will simply get their original capital at the end of the term plus a fixed return of 28 per cent.

Citigroup&#39s enhanced growth plan III is a similar six-year FTSE 100-linked plan with a choice of two options. Option one offers a full capital return regardless of index performance plus 105 per cent of any rise in the index &#45 a return which is slightly higher than the Abbey plan.

However, its second option has an early maturity feature which will offer a fixed return of 30 per cent only of the FTSE 100 index has risen by at least 30 per cent by the third year. Otherwise investors will get 130 per cent of any increase in the index. This is more uncertain than the second option of Abbey&#39s plan and will appeal to a different type of investor.

Recommended

Standard Life – Secured Capital Plan

Type: Capital-protected Oeic Aim: Growth linked to the performance of the FTSE 100 index Minimum investment: Lump sum £5,000 Isa link: Yes Pep transfers: Yes Term: Five years and 48 days Return: 82.4% growth in the index Guarantee: Original capital returned in full at end of term regardless of the performance of the index Closing […]

Cazalet conference on closed funds

Cazalet Consulting will be holding a conference on September 28 on closed life funds and life company restructuring. The conference&#39s panel will be discussing its impact on organisations including life companies, reinsurers, asset managers and investment bankers and the increases of disaggregation and reaggregation within the UK life industry. The panel of speakers will include […]

Penrose boxing

For those looking for a PR agency with a bit of a kick that pulls no punches, the Diary can only recommend Penrose Financial. Louise Hatch and three of her staff are learning to kickbox. As if she wasn&#39t intimidating enough. So if the powers of persuasion fail to elicit the correct response from various […]

FSA aiming for further cut in enforcement case times

FSA chief executive John Tiner is warning that IFAs could be hit by enforcement proceedings faster if the regulator succeeds in its plans to reduce case times. The FSA is aiming for a further 30 per cent reduction in the average case time over the next 12 months. In the last two years, the regulator […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment