View more on these topics

Gilliat builds variable income

The April 2010 issue of Gilliat income builder is a FTSE 100-linked structured product that aims to pay a variable annual Income of up to 7 per cent during the investment term of six year and two weeks.

The income payment accrues daily so long as the index does not fall 40 per cent or more from its initial value. This works through a series of options that pay a fixed coupon of 0.027 per cent for every day during the term that the index is greater than 60 per cent of its initial value.  This means the maximum income possible during the term is 42 per cent and each annual payment will reflect the number of days in that year that the index is greater than 60 per cent of its initial value.

The product also has a 60 per cent capital protection barrier, so that investors will receive a full capital return at the end of the term provided the index does not fall by 40 per cent or more by the final day of the term. For capital protection purposes, index levels are measured only at the start and the end of the term, so its performance during the rest of the term does not affect the return of capital.

Gilliat has back-tested this product during all 5,119 six-year cycles that occurred between the inception of the index in January 1984 and March 26, 2010. It says the 60 per cent capital protection barrier has never been breached and that the product would never have paid less than 35 per cent income over any six-year period.

However, this does not mean it is impossible for investors to lose some or all of their capital, or receive less than 35 per cent income over the term, as the performance of the index cannot be predicted six years in advance. The variable nature of the annual income may also be unsuitable for some investors.


Switching referral service for IFAs

Online pension adviser is offering a pension-switching referral service for IFAs. offer an identical service to, where clients are offered a free online report with a recommendation on any pension transfers before they decide to deal with the adviser. charges a minimum £750 fee to the client on a sliding scale […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm