View more on these topics

Julian Gibbs

At the time of writing, the FTSE 100 has slipped to around the 4,000 mark and, while there may be continuing volatility, I do not believe it is possible for the FTSE to fall to below the 2,000 level. This is the 50 per cent downside protection offered by the NDF UK growth plan 2, which offers unlimited growth based on the FTSE 100 index.

To me, this is the lowest-risk way of investing in a tracker fund. For income investors, NDF is also offering the income & growth plan 3, which gives 9 per cent a year tax-free income if invested through an Isa or Pep transfer, with downside protection of 20 per cent. It is also linked to the FTSE 100 but, very importantly, any breach of this 20 per cent does not apply during the first year.

I would be hugely surprised if this 20 per cent barrier is breached after the first year as the stockmarket should surely have began to recover by September 2004. Otherwise, this would be by far the longest UK bear market in history.

At a time when the manufacturing sector is recovering, the outlook for interest rates remains steady and nearly all fund managers are expecting the UK stockmarket to rise over the next year or two, I believe that this is the safest way of taking a 9 per cent a year income, especially as the tax rates are only 10 per cent for basic-rate taxpayers and 32.5 per cent for higher-rate taxpayers outside an Isa or Pep transfer, offering 8.1 per cent and 5.6 per cent net respectively.

Plan assets for both products are invested with Abbey National Treasury Services. For even the most conservative investors who require income or capital growth, these seem to me eminently sensible investments, especially when the returns from building societies and guaranteed income bonds are so much lower.


Northern Rock funds L&G Bank&#39s broker-only deal

Legal & General Bank is offering a flexible mortgage fixed at 5.19 per cent until December 2005, available only through intermediaries.The product is funded by Northern Rock, which owns L&G Bank, but is being marketed to brokers through L&G appointed representatives.The loan offers a procuration fee of 0.35 per cent. It is available up to […]

Bates in multi-manager deal with Aim

Bates Investment Services has appointed Axa Investment Managers as its preferred multi-manager provider in a move that the IFA hopes will protect clients against high manager turnover.Bates, which last week sold a 33 per cent stake of its business to investor consortium Asset Strategies, will start selling Aim&#39s range of manager of manager funds through […]

FSA&#39s recipe is for an IFA mutual PI

An IFA-funded mutual insurance scheme could be the answer to the PI crisis facing many advisers, according to the FSA.As the FSA looks at solutions to alleviate the problems IFAs are having with finding PI cover, head of investment firms David Kenmir says he has been informally approached with the idea of a collective pool […]

The public do not want to pay fees

At times it feels like financial services policy can be summarised by the phrase “fees good, commission bad”.The problem is that no one asked the public – or at least not very many of them. This week, research for Money Marketing by Nunwood Consulting shows four out of five people from 1,000 surveyed do not […]

When will US rates rise?

By Felix Wintle, Investment Director & Head of US Equities The most recent communication from Federal Reserve chair Janet Yellen has put the market’s sights on September as the most likely month for the first rate rise. This is due to the stronger than expected economic data of late, particularly in employment and housing, which […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm