The Investment Management Association believes National Savings & Investments is misleading customers in marketing its guaranteed equity bonds.
In its response to a European Commission investigation, it disputes NS&I claims that “thousands of investors are playing the stockmarket without risking a penny”. It compared the first three issues of NS&I GEBs with three leading UK index-tracking funds. The GEBs lagged the trackers by 2.9 to 3.7 per cent a year and 15 to 20 per cent over five years.
IMA chief executive Richard Saunders says: “These products have been widely promoted as a risk-free way of getting a stockmarket-related return. They offer the first but not the second. They appear to be a complicated and opaque way of delivering the same returns over time as a good deposit account.”