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Julian Gibbs

There are three excellent new growth plans being launched, which should show better returns than tracker funds and with a much higher measure of safety.

One, from Key Data, is a six-year plan which offers five times any rise in the FTSE 100 index, subject to a maximum investment return of 60 per cent plus an extra 12 per cent bonus, should the FTSE 100 Index rise by 60 per cent or more above its start level. This would give an average potential return of 9.5 per cent a year, with the capital returned in full, provided the index never falls by more than 40 per cent from its start value and does not recover.

The other plan is from NDF and is also over six years. One option offers 200 per cent of the FTSE rise over the period, subject to a maximum profit of 80 per cent -a potential return of 10.2 per cent a year – with downside protection of 50 per cent.

The second option gives 100 per cent the rise in the FTSE 100 index with no upper limit and with 100 per cent capital protection at maturity.

If the index has risen by 40 per cent or more after four years, the plan will mature early with 140 per cent total repayment.

There is every chance of FTSE 100 rising by up to 75 per cent or so over six years but it is unlikely, even from current low levels, to achieve much more. Tracker funds would only be a better bet, albeit with no downside protection, if the returns including net income were higher than 72 per cent or 80 per cent of the potential returns on the other plans.

Both the Key Data dynamic growth plan and the NDF double growth plan 4 are good value if the FTSE 100 rises by less than 10 per cent a year, while for those people who believe that FTSE 100 index will rise by more and want full capital prot-ection, the NDF capital protected option is best.


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