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Inora Life brings in with-profits alternative

Inora Life, the Dublin-based offshoot of Societe Generale, has designed a capital protected offshore bond as an alternative to with-profits bonds.

The protected profit bond has a five-year term and is available in an income and a growth version.

Investors with the growth option get 100 per cent of their original capital returned after five years while the income version offers quarterly income of 2.5 per cent, plus the remaining 50 per cent of original capital returned at the end of the term.

Investors receive bonuses which are similar to those offered by with-profits bonds. Those with the income version are paid a fixed bonus of 5 per cent, while those with the growth option receive 10 per cent.

A terminal bonus is also payable on maturity but this depends on the performance of a stockmarket index. Investors can choose to link the bond to the Nasdaq 100 index or the Eurostoxx 50 index.

The Nasdaq 100 index has a maximum potential bonus of 150 per cent of the original investment while the Eurostoxx 50 has a maximum potential bonus that is lower at 100 per cent. This reflects the specialist, high-risk nature of the Nasdaq 100 index compared to the broader blue-chip based Eurostoxx 50.

A monthly average of the index is taken throughout the term and averages that have fallen are added together then deducted from the maximum potential return, which produces the terminal bonus.

Investors who want full capital security may be attracted to this product. Its advantage over with-profits bonds is that investors know from the outset what the fixed bonus rate is and they are told how the terminal bonus is calculated.

However, this is quite a complicated product to explain. Some investors may find it difficult to grasp how the terminal bonus is calculated and as the charges are implicit with the product, the attempt at transparency is compromised.


SEI rethinks Dublin arm as bond is put on hold

Scottish Equitable Intern-ational is considering its options for its Dublin-based offshoot after having to put its with-profits bond on ice. SEI opened offices in Dub-lin with the intention of offering the with-profits bond. But following the events of September 11, the launch was delayed, with the company claiming that the climate was now too unfavourable, […]

B&W Isas investment cake

Bristol & West is offering a stockmarket-linked cash Isa that tracks the FTSE 100, Eurostoxx 50 and Nikkei 225 indices over a five-year term.The five-year guaranteed equity bond cash Isa offers investors with at least £500 the return of their original capital regardless of the performance of the three indices. However, there is a 70 […]

Why no amount of marketing can replace advice

I read with a heavy heart Money Marketing&#39s articles on the speech given by Mr Sandler and once again I find myself moved to put pen to paper. Of all that was said by Mr Sandler, I would agree with one point – greater prominence is to be given to measures aimed at stim-ulating the […]

Bupa cashplan complements PMI

Bupa has designed a healthcare cash plan that aims to complement private medical insurance (PMI).There is just one level of cover but there is a range of premiums for different types of people. Single people pay £10 a month, single parents pay £13 a month, couples pay £17 a month and family cover costs £20 […]

UK: mid-year review and outlook

By Mark Martin, manager of the Neptune UK Mid Cap Fund, and Scott MacLennan, manager of the Neptune UK Opportunities Fund H1 2014• Equity markets continued to show strength: despite a strong rally in 2013 driven by a market-wide re-rating, equity markets continued to generate positive returns for investors. Economic activity continued to be stimulated […]


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