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AIG Life adds and subtracts

The third issue of AIG Life&#39s protected growth bond is a guaranteed equity bond that is linked to the FTSE 100 index for six years.

Investors who can meet the minimum investment of £10,000 will get their original capital, plus a minimum return of 23 per cent, whatever happens to the index. The return is capped at 60 per cent, so the maximum investors can get is 160 per cent of their investment.

To calculate the returns, the level of the FTSE 100 index is taken on April 19, 2002 and on the same date every year throughout the term. Any growth in each year is capped at 10 per cent and is added to the final return. Any fall is capped at 5 per cent and this is subtracted from the final return.

The bond may be a good investment option for cautious investors who want the security of a guarantee, which stretches to a minimum 23 per cent return above the original capital. According to Standard & Poor&#39s, the FTSE 100 index rose by 68.59 per cent in the six-year period between April 1, 1996 and April 1, 2002, which indicates that good returns can be had over a six-year term.

However, the way this bond calculates the final return makes it unlikely that investors will receive the maximum growth, despite the fact that falls are capped at a lower rate than growth in the index. The FTSE 100 index would need to increase by at least 10 per cent every year until April 2008 for maximum growth potential to be reached.


UCB retains network&#39s award for best service

UCB Home Loans won the award for best lender service at mortgage network The Mortgage Power&#39s fifth annual awards at Northolt, Middlesex last week.It is the third year running that UCB Home Loans has won the award, presented at a ceremony attended by Mayor of Ealing Ranjit Dheere and Mayor of Hounslow Mohinder Gill.Ocaso received […]

Leeds & Holbeck Building Society – Escalator Plus

Wednesday, 3 April 2002 Type: High interest account Minimum-maximum investment: Lump sum £100-£10,000 Interest rates: Year one 4% gross a year, year two 5% gross a year, year three 5.5% gross a year Term: Three years Offer period: Until further notice Withdrawal penalties: One penalty-free withdrawal a year provided £100 balance remains Tel: 0500 225777

Our industry should be proud of its record

I hope that the following information may be of interest to your readers.In 1995, I sold a life and critical-illness policy to a friend – called Jane for the purpose of this letter. It supported her mortgage.She argued for some days over the inclusion of critical-illness cover and, of course, said it was not cover […]

Pru International branches out with prudence bond

Prudential International, the newly formed offshore branch of Prudential, has established a with-profits and unit-linked bond called the international prudence bond.The bond is marketed mainly as a with-profits bond, but in addition to two with-profit funds, it offers a range of 11 unit-linked funds from five external fund managers.One of the with-profits funds is sterling […]


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