View more on these topics

Julian Gibbs

The new Nvesta secure multi-tracker plan is a much better product than conventional tracker funds in that it is capital-protected and offers a return of 110 per cent of the rise in the FTSE 100, S&P 500 and Nikkei 225 indices in equal proportions, with the returns being uncapped, unlike many other capital-protected products.

It is a six-year product, with the final index levels being defined as the average of the monthly closings in the final year.

With markets much lower than five years ago – down an average of about 20 per cent, with the S&P 500 performing worst – now should be a good time to invest as markets should continue to rise over the longer term.

For example, if this product performs in line with the average of these equity markets over the past 10 years, which I think is a fair assumption taking into account the past five years&#39 poor performance, then this product would give a return of over 90 per cent – not bad for a six-year investment with no risk to capital.

From a taxation point of view, the profits are taxed as capital gains which, of course, are tax-free if invested in through an Isa. For direct investors who have no other capital gains, the first £8,200 is tax-free. This figure usually goes up by inflation each year. The balance is taxed at a maximum rate of 32 per cent for higher-rate tax payers and 16 per cent for basic-rate taxpayers due to taper relief.

This is an excellent way for people to build up capital for retirement and also a good way for parents to help their children build up capital. This product is highly rated by Future Value Consultants and is the best product of its type available at present.

A word of warning, though. Avoid capital-protected products where the returns are capped because, at current stockmarket levels, investors may lose out.

Recommended

&#39£8bn in underperforming funds&#39

Hargreaves Lansdown has highlighted underperform-ance of Scottish Equitable pension funds in a wide-ranging review of the sector. The report, Income-reducing Pension Funds, covers managed and UK equity funds. It reveals that two Scottish Equitable funds – the UK equities pension fund and the mixed pension fund – measured over one, three, five and 10 years […]

Feeling the punch

Increasingly, I find myself wondering how on earth we ever get any business done.If it isn&#39t regulatory hurdles that disrupt the previously smooth flow of business, then it is product providers tying themselves up in knots as they strive to demonstrate super-compliance with the afore-mentioned hurdle-makers. Do you need an answer to a quick question […]

Feathers fly over turkey roasting

LIA director general Mark Ommanney has hit back at former LIA chief executive Jeff Travis who said that LIA members voting for the merger are like turkeys voting for Christmas. Ommanney says a merger would lead to the LIA being part of a stronger more unified voice for advisers. He believes it would allow advisers […]

MERGER EDGE: Bob Bullivant

In the 14 years since its inception, Sofa has carved out a well deserved reputation for high standards and competence. Around half of our 10,000 members are FPC-qualified while the other 5,000 have passed the higher AFPC exam, qualifying them for the designatory letters MSFA, ASFA or FSFA. Of course many of the FPC-qualified people […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    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

    Email: customerservices@moneymarketing.com