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Defaqto on Incapital Europe’s Digital Growth plan – FTSE 100 Series II

View of Defaqto insight analyst for funds Fraser Donaldson

Donaldson says: “This product is aimed at investors who believe that the UK market, as measured by the FTSE 100 index, will not fall by 50 per cent over the next six years. If the index falls, but not by more than 50 per cent, capital will be returned in full at the end of the term.

“If the index falls by more than 50 per cent, capital will be lost on a one for one basis. The only other risk associated with this product is the counterparty. If the counterparty becomes insolvent before the end of the term the original investment will be lost. However, the counterparty is Santander UK, which is AA rated by Standard & Poors. Although possible this is very unlikely. Even with the severe financial crisis of the last three years, few financial institutions have gone under.

“In these times of volatile markets and very low returns on cash, 68 per cent growth over six years is very attractive. Subject to the risks, knowing precisely what the prospective return will be after six years is very useful from a financial planning perspective.”

www.defaqto.com

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