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Income & growth enter the Premier league

Premier Fund Managers has introduced a Dublin-based closed-ended fund that is linked to the performance of the FTSE 100 for five years.

The Premier income and growth plan gives investors a choice of annual income of 7.5 per cent, monthly income of 0.6 per cent or growth of 42 per cent at the end of the term. Investors will also get all their original capital back, providing the FTSE 100 index does not fall by more than 25 per cent. where this does happen, investors will get their capital back in two situations.

The first is where the index falls beyond 25 per cent during the term, but recovers to at least its starting level by the end of the term. The second is where the index rises by 40 per cent or more at any time during the term, which will override a fall of 25 per cent even if the index fails to recover by the end of the term.

Where the index falls by more than 25 per cent, without rising by at least 40 per cent at any point, and fails to recover by the end of the term, the capital will be reduced. Investors will lose 2 per cent of their capital for every 1 per cent fall in the index.

To calculate the final returns, the closing value is recorded on April 30, 2002 and is compared with the lowest closing level of the index during the last six weeks of the term.

Although the product offers some degree of capital protection, investors should note the risk of significant capital erosion. However, a 40 per cent rise in the index at any time would lock in the capital protection feature and this could soften the blow if the stockmarket recovery gathers pace.


Britannic makes it clear

Britannic Assurance has introduced a with-profits bond that aims to be more transparent than traditional with-profits bonds.The Britannic Assurance with-profits bond builds on the concept behind the Britannic with-profits pension annuity, which brought transparency to with-profits annuities.The bond invests in Britannic&#39s with-profits fund and unlike traditional with-profits bonds, investors will be kept informed of performance […]

Insurance protects investors&#39 estates

Rothschild Asset Management is adding a new life insurance feature to its wealth management service to protect an investor&#39s estate from the effect of falling stockmarkets.The Five Arrows Protected Wealth Management Service provides insurance cover to protect clients&#39 beneficiaries by guaranteeing a protected value of the fund in the event of death.The protected value is […]

Cazalet attacks upgraded Friends rating

Industry analyst Ned Caz-alet has criticised ratings agencies Standard & Poor&#39s and Moody&#39s for upgrading Friends Provident&#39s financial strength despite mounting liabilities and reduced excess capital.Following its demutualisation last year, Friends floated on the stockmarket and injected £1.2bn of the £1.6bn raised into its with-profits fund, earning a AArating by S&P and an Aa3 rating […]

Pink Home Loans three-year buy-to-let discount

Pink Home Loans three-year buy-to-let tracker Type: Buy-to-let base rate trackerTracker term term: Three yearsTracker rate: Bank base rate plus 1.98%, 1.23% discount for three yearsPayable rate: 4.75%Minimum loan: £25,001Maximum loan: £500,000Income multiples: Rent to exceed 125% of the mortgage payment Arrangement fee: £395Redemption fee: 5% of amount repaid for three yearsConditions: Funded through VersoIntroducer’s […]

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England vs Australia: pensions

Well, the cricket season is here, and England and Australia are stepping up to the wicket. Although we compete with each other in the sporting world, when it comes to pensions, Australia’s pension programme is held up as a model for our auto-enrolment initiative. Auto-enrolment was introduced because people weren’t saving enough into their pensions, and it is still early days but signs are positive. However, in Australia, saving into a pension is compulsory, and in fact employers are the ones who have to pay in. Employees in Australia can make additional contributions into their pensions, but they don’t have to. Should the onus be on the employer or employee to save? Well in the UK we think it’s both, but to get ‘adequate’ savings for retirement it’s the employee who has to pay more in.


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