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Bond investors need&#39a market miracle &#39

Investors are set to lose hea-vily on stockmarket-linked bonds unless there is a “miraculous” recovery in the markets, according to research from IFA Chartwell.

The firm is predicting that bonds will be the investment scandal of 2003, with some investors in danger of losing all their money. Investors in Canada Life&#39s Nasdaq-linked high-income bond 3, for example, need the index to rise by 154 per cent by April next year to see their full capital returned.

Others need stockmarket rises of between 30 and 67 per cent to repay their original investment.

Eurolife&#39s income and growth plan 2 bond is on course for a 67 per cent loss. NDF&#39s three income and growth plans need the Eurostoxx 50 to rise by at least 60 per cent in the next year for investors to suffer no loss on capital.

Providers have hit back at the survey, saying it takes no account of the high income levels that investors have received.

Chartwell is submitting its findings to the FSA, which is investigating high-income bonds.

Canada Life executive director (strategic development) Stephen Tsu says: “It is unfortunate that the bond is linked to the Nasdaq which has done unprecedented things. Investors have at least enjoyed very high income levels.”

Chartwell associate director Patrick Connolly says: “Some people are set to lose a lot of money unless there is a miraculous recovery in the stockmarket.”


IFAs must act to ward off snooping

The so-called “war on terrorism” is in danger of becoming an authoritarians&#39 charter, restricting our liberties as the Government authorises snooping on all our communications data.If this move is allowed through Parliament it will soon be possible, without the need for a court order, for phone calls, internet transactions, emails and the post to be […]

Cazalet says FSA to crack down on FARs

Top industry analyst Ned Cazalet is predicting an FSA clampdown next year on what he claims to be the risky way some life offices calculate their free-asset ratios.Speaking at Pims 2002 on the Aurora on Monday, Caza-let picked out Royal & Sun Alliance and Friends Provident as the worst offenders, saying the FSA was concerned […]

More complaints on Halifax loans

The financial ombudsman is receiving new complaints from Halifax mortgage customers unhappy with the bank&#39s handling of the dual-pricing situation.The ombudsman says it is investigating further complaints from borrowers after its ruling in March against Halifax found in favour of a customer who was kept on an interest rate of 5.75 per cent when a […]

Zeros tolerance

For some time, financial advisers have been actively encouraged to study for Advanced Financial Planning qualifications.Course G70 contains the following statements:a: “Split capital investments trusts are designed to appeal to many different types of investor.”b: “The return on zeros is not guaranteed but there is a very strong likelihood that the return will be paid.”c: […]

William Littlewood “betting that QE won’t work”

Journalist Alexis Xydias interviews Artemis manager William Littlewood about his views on bond, equity and currency markets and the impact of a Greek exit from the EU. With bond yields at “ludicrous” levels, William believes a tipping point for bond markets is sure to come. As a result, his Strategic Assets Fund holds government bond shorts to the tune of 100 per […]


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