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Julian Gibbs

Scottish Life International&#39s protected bonus plans have certainly proved their worth. A friend of mine invested £50,000 in the original six-year plan, which matured late last year with a profit of 69 per cent.

Its current protected deposit bonus fund, with 100 per cent capital protection, is showing a return of 31 per cent over the last five years and nine months. The indices to which it is linked, the FTSE 100 and S&P 500, are down by 24.7 per cent and 6.7 per cent respectively. These are extraordinarily good returns in what has proved to be one of the worst periods for investment for over 100 years. Even SLI&#39s slightly more risky funds, where the downside risk was up to 5 per cent a quarter, have lost little.

Marketing director John Allison challenged Richard Branson to a £6,000 charity bet that the SLI Protected Deposit Bonus 95 fund would outperform Virgin&#39s UK index-tracking fund and also “superwoman” Nicola Horlick&#39s SG UK growth fund over five years .

Virgin took up the challenge and is now paying £6,000 to SLI&#39s chosen charity, Save the Children, as the Virgin UK index tracker lost more than 32 per cent over the period while SLI&#39s fund was down by only 5.3 per cent. Horlick quite rightly did not accept the challenge as the SG UK growth fund was down by more than 38 per cent over the same period.

In fact, 49 out of 52 of SLI&#39s capital-protected funds have outperformed their respective indices since launch, with all the 100 per cent capital-protected funds showing positive returns.

In today&#39s volatile markets, SLI&#39s type of protected funds are a much better bet than tracker funds unless the market rises fast and continuously. IFAs should certainly look at SLI&#39s funds again.


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