View more on these topics

Inora Life serves offshore generation

Inora Life has added the safeguard fund to its offshore generation bond range.

This Dublin-based capital protected fund is designed for growth and is also available as an Isa. It is linked to the FTSE 100 index for six years.

To calculate the return, the average level of the FTSE 100 index over the first six months is recorded and is then measured again at the end of the third year. If it is 20 per cent or more higher than the starting level, a 20 per cent minimum return is guaranteed. The starting level of the index is then reset and measured against the average level of the FTSE 100 index during the final 12 months of the term. Investors get 100 per cent of this growth.

The bond is unusual in that any growth in the first three years is locked-in to provide a 20 per cent minimum return. This may be a good thing for cautious investors who are worried about ending up with only their original capital after six years. But, the drawback is that they will not fully benefit from higher growth in the early years because of the 20 per cent.

Receiving 100 per cent of growth in the final three years may be attractive because there is no cap on growth. This means investors would benefit most if the index performs better during the latter three years. However, stockmarkets have been at a low level for some time and investors may lose out on growth if share prices start to recover during the next three years, then fall back during the final years of the investment.

Recommended

Waiting on line

Millions of pounds have been invested in the development of online new business systems, promising to provide complete online transactions and reduced costs across the industry.Why is it then that so few IFAs are using it and so many more are in the dark over its availability and purpose?It might be helpful to give a […]

To fee or not to fee?

As part of the FSA&#39s wide-ranging review of polarisation, it has published research in CP121 indicating that consumers prefer to pay fees for financial advice.The FSA was unable to tell Money Marketing what percentage of people would pay fees but does say it conducted 36 face-to-face interviews and four focus groups of 10 people each. […]

Equitable late joiners to sue

The Equitable Late Joiners Action Group has confirmed it plans to sue the society.The action group alleges Equitable was aware of the size of its liability to Gar policyholders when it sold them their policies following the High Court ruling against it in July 2000.Following today&#39s High Court ruling in favour of the compromise package […]

&#39Take Isas guides with a pinch of salt&#39

The FSA has issued a warning to consumers over Isa guides, telling them to make sure they “take them with a pinch of salt.” FSA head of consumer education Deborah Arnott said consumers should always read the fine points and resist sending off a cheque straight away. Last year, FSA managing director John Tiner said […]

Mark Page: “A good time to be a European fund manager”

With European markets picking up in early 2015, Mark Page, Artemis European Opportunities Fund manager, discusses the ‘macro’ drivers and whether the improvements are sustainable. Largely driven by economic stimulus by the European Central Bank, European stockmarkets have performed strongly so far in 2015. Mark discusses the relative merits and sustainability of ECB policy with […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment