The ideal investment is one that gives high potential growth or income with a guaranteed return. Credit Suisse First Boston has pioneered an investment for institutions which should achieve this objective. It invests in a portfolio of hedge funds and fixed-interest securities and gives a guaranteed return of the original capital invested after a number of years. For the first time, this type of investment is also available for individual investors through Isas or Pep transfers or as a direct investment in a Dublin-based company where no tax is paid within the plan. NDF Administration is launching this plan in conjunction with CSFB. It will give a guaranteed return of investors' money after six years. CSFB International has an impressive track record of managing investments like this new protected hedge growth plan. Over the past year, when the FTSE All Share index fell by 5.27 per cent, the performance of CSFB's hedge fund portfolio rose by 17.23 per cent net of charges. Because of the way hedge funds work, gains can be made both when the market goes up and when it goes down, so they are an ideal part of an investor's portfolio in today's volatile markets.
This type of investment is particularly suited to investors who wish to lock into investment gains through Pep transfers and Isas, as well as bigger investors who wish to protect their portfolios against losses and pay lower taxes than normal. Profits on Isas and Pep transfers are, of course, tax-free and investments can be made for 2000/01 and 2001/02. This means a married couple can invest £28,000 plus any amount of Pep transfers they have. Unlike most plans of this type, there is no upper limit to the gains that could be made. This is certainly an innovative plan.