Incapital Europe has brought out a third issue of its six-year FTSE 100-linked digital growth plan.
This provides 65 per cent growth at the end of the term provided the index is at or above its initial value on December 12, 2016. The plan will also provide a full capital return at that point provided the index has not fallen below its initial value on the same date. However, if the index breaches this barrier, investors will lose 1 per cent of their original capital for every 1 per cent fall in the index.
The Structured Product Review adviser website notes that the returns offered by this plan are slightly lower than the previous issue, but still regards this as one of the best FTSE 100 linked growth investments currently available, given the extent of the market barrier and that only a small increase in the index is needed to achieve the returns on offer.
Some advisers may like this plan for its simplicity, but as at November 17, 2010, other plans were available from Gillat, Legal & General and Barclays Wealth.
Gilliat’s UK growth multiplier offers potentially higher returns than Incapital’s plan through geared exposure to the FTSE. It provides eight times the growth in the index capped at 80 per cent of the original capital. However, some investors may not like its more onerous capital protection barrier, where capital is at risk if the index falls by more than 50 per cent during the term and fails to recover by the end of the term.
L&G’s 6-year growth deposit bond 4 and the Barclays FTSE returns plan provide twice the index growth capped at 45 per cent and 100 per cent of index growth capped at 40 per cent respectively. The potential returns are lower than Incapital’s plan but both have greater protection, as a full capital return is not dependent on index performance.