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Higher return from lower expectations

I was very surprised by the comments of the normally excellent Julian Gibbs (Money Marketing, November 20). He is completely mistaken to say that "in reality it is most unlikely that any of the major world stockmarkets will be lower in five-and-a-half years".

He should know that it is only because there is a very high probability that at least one of these markets will be lower at the end of the period that such apparent returns can be offered.

These bonds are primarily invested in cash, the remainder is placed in suitable options and other derivatives. The market is calling the probability of one of these markets falling to be at least 20 per cent. Because of this, a return better than gilts can be offered to the investor. You should be aware that the Institute of Actuaries has advised potential clients to beware of these products.

Buying such bonds is more akin to gambling than investing.

Jonathan Goold

NZI Life Ireland,



Derby kicks off with Bank of Scotland loans

Derby County Football Club is aiming to score in financial services with the launch of a range of new products. The Premier League club is preparing to launch unsecured loans backed by the Bank of Scotland in association with marketing company TransNational. The club has also recently relaunched an affinity cre dit card through TransNational. […]

Grenfell returns with managed risk fund

Morgan Grenfell Asset Management is returning to the retail market with a protected unit trust modelled on its institutional managed risk equity fund. The All-Weather equity fund aims to provide an element of protection to investors who are seeking exposure to equities but are uncomfort-able with the perceived risk. But the biggest challenge will be […]

Group pensions boost Scot Life

Scottish Life&#39s new life and pension business leapt by 35 per cent to £102.1m last year from £75.7m in 1996, following major gains in the group personal pension market. Total GPP business soared by 267 per cent to £23.5m from £6.4m. Single-premium GPP sales rose by 369 per cent to £22.5m from £4.8m. Total individual […]

It&#39s all grow for &#3998

1998 is set to be a record year for life and pension companies but the hectic pace of growth seen in 1997 is going to slow, according to a Money Marketing survey of the biggest companies operating in the IFA market. Growth is forecast to be around 7-8 per cent in 1998 following a startling […]

Benefits - thumbnail

Global benefits predictions for 2015 from Jelf International

According to Doug Rice, managing director of international services, in 2015, managing their international duty of care will become an increasing focus for UK-based overseas organisations in both managing their short- and longer-term challenges. As a result, strong independent advice and innovative technological solutions will become more important than ever in managing their global benefits.


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