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Julian Gibbs

The problem with Tessas at the moment is that they return only about 5 per cent a year and, with the recent cut in interest rates and forecast further cuts, returns are likely to reduce even more.

Credit Suisse First Boston, in conjunction with DLJ Direct, is offering maturing Tessa investors and those who have already reinvested into a Tessa-only Isa a potential for 55 per cent growth over five years – about double the likely returns on a conventional Toisa.

It is called the Global Titans Tessa plan and, unlike any other Tessa, allows investors to withdraw 10 per cent capital a year tax-free. It is linked to five separate baskets of the top 50 shares in the world, being constituents of the Dow Jones Global Titans index. Provided that none of the stocks in each of the baskets falls by more than 33 per cent from the initial level in the fifth year, then growth investors will receive an 11 per cent return on their capital for each basket.

Under the annual withdrawal plan, investors will receive a 10 per cent return on each basket.

Even taking into account the recent falls in world stockmarkets, the worst return since January 1, 1991, when the Global Titans index was instituted, would have been 130 per cent of an investor&#39s money. That would have given them a profit of 30 per cent, which is more than is likely under conventional Tessas. The maximum return was 155 per cent and the average return over the period was 145 per cent.

It is highly unlikely that, in the next five years, any of the constituents of the Global Titans index will fall by more than 33 per cent from the initial level, which will be calculated on December 31. I like this plan because of its high potential returns and total capital security.

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