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Julian Gibbs

I am usually opposed to investing in stockmarket-linked bonds that run for

less than three years but I have found an excellent exception that proves

the rule. This is the new NDF Extra Bonus Plan 3 plan backed by Abbey

National Treasury Services.

It pays either 10 per cent growth or 12 fixed monthly payments of 0.73 per

cent of the capital invested. There is a final payment of 100 per cent of

the initial investment, unless the FTSE 100 index falls by more than 20 per

cent from its initial level.

I have done some investigation and asked 10 major forecasters, such as

Merrill Lynch, UBS and Salomon Brothers, how much they expect the index to

rise by the end of December this year and by the end of December next year

from a level of 6,107.

The average rise forecast for the end of December this year is 9.2 per

cent. UBS forecasts a fall of around 1.8 per cent while ABN Amro makes the

most optimistic suggestion of a rise of 16.5 per cent.

Those who are prepared to look to the end of 2002 forecast an average

increase of 8.1 per cent. So, to me, a 10 per cent guaranteed return,

provided the FTSE 100 index does not fall by more than 20 per cent, is an

excellent investment.

It is much better than a tracker fund. Of course, returns are tax-free if

invested in through an Isa or if the gain is within the investor&#39s capital

gains tax-free allowance.

With interest rates at near record low levels and likely to fall further

still, a 10 per cent tax-free return over 13 months is very attractive.

A husband and wife could invest £82,000 and receive £8,200

tax-free by using up both their capital gains tax and Isa allowances. To

me, this is a pretty safe bet and a far better option than keeping money on

deposit at a building society or bank.


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Collins Stewart – Blue Chip Value And Income Fund

Friday, 8 June 2001.Type: Split-capital investment trust.Aim: Income and growth by investing in UK large-cap companies.Minimum investment: Subject to negotiation with stockbroker.Place of registration: Guernsey.Investment split: Blue chip UK equities 75 per cent, bonds and high yielding investment trusts 25 per cent.Yield: 8.75 per cent.Isa link: Yes.Charges: Annual 1 per cent.Commission: None.Tel: 01534 280068.

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When someone mentions whole of life plans, most people will think of a niche product that serves as an inheritance tax planning tool for high-net-worth clients. And it’s really not surprising they’ve been pigeonholed in that waybecause before the arrival of RDR in 2013, that’s more or less exactly what they were. For advisers thinking […]


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