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Julian Gibbs

Stockbroker Cazenove has linked up with international insurer AIG to launch the AIG Cazenove universal investment bond.

This combines the tax advantages of unit trusts and investment bonds in that, because of the AIG&#39s tax position, unlike other bond funds, there is no deduction against the underlying funds to meet the tax payable by AIG Life. All returns, therefore, have tax paid at the basic level, giving a reduction of tax of up to 22 per cent.

The minimum investment is £50,000,a much lower level than usual for investors to use Cazenove&#39s excellent fund management.

There are four portfolios available, all investing in top unit trusts and aimed at different types of investor. For most people, the AIG Cazenove universal growth portfolio and universal balanced portfolio would be my choice. They include such excellent unit trusts as Fidelity European, Fidelity American, Credit Suisse income, Old Mutual UK select smaller companies and Invesco Perpetual income.

Like other investment bonds, 5 per cent a year can be withdrawn by higher-rate taxpayers and only 18 per cent tax is paid if they withdraw more or if the bond is encashed.

Mark Harries, the portfolio manager, already runs £700m worth of assets and, before joining Cazenove, was the head of Prudential Bache Asset Management. His past record is outstanding.

Cazenove has also launched a unit trust portfolio service based on the same portfolios as the bond. The investment bond, in particular, is an outstanding investment opportunity and combines top investment expertise and unequalled tax-efficiency with the backing of two of the highest quality financial companies in the world.


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