View more on these topics

Keydata provides extra income

Keydata Investment Services has established a fourth issue of the extra income plan, a guaranteed equity bond linked to the FTSE 100 index during a five-year term.

The bond initially offers investors a choice between two options. Option one provides a further choice of 8 per cent income a year, 1.93 per cent income a quarter or growth of 43 per cent at the end of the term. Alternatively, investors can choose income of 6 per cent a year, income of 1,44 per cent a quarter or 32 per cent growth at the end of the term under option two.

Investors will get all their original capital back whatever option they chose provided the FTSE 100 index never falls by more than 40 per cent between May 19, 2003 and May 19, 2008. Where the index breaches this safety net without recovering, investors will lose a percentage of their capital.

With option one investors will lose 2 per cent for every 1 per cent fall in the index, which means no capital will be returned if the index falls by more than 50 per cent. Option two means investors will lose 1 per cent for every 1 per cent fall in the index.

This product is one of the more complicated, riskier guaranteed equity bonds. Although it offers a range of options to suit investors&#39 objectives and risk profiles, this increases its complexity.

In addition, investors&#39 capital is not completely protected and the price option two investors pay for higher returns than option one investors is a greater degree of capital loss if the safety net fails. This suggests this product may only be suitable for sophisticated investors who understand that capital protection does not necessarily mean low risks.

Recommended

Close Property Investment – Property Investment Portfolio

Friday, April 18 2003 Type: Offshore fund of funds Aim: Growth or income by investing in property funds Minimum investment: lump sum £11,000, $15,000, euros 16,000 Place of registration: Isle of Man Investment split: Choice of freehold income trust, capital appreciation trust, active commercial estates plc, healthcare and leisure property fund, Close high income properties […]

Friendlies want immediate start for child trust funds

Friendly societies have welcomed the introduction of child trust funds from 2005 but are calling on the Chancellor to allow additional contributions to be made straight away. The initial Government payment into the fund at birth has been set at £250 for every child. This will be raised to £500 for children from low-income families […]

To transfer or not to transfer?

Just when you thought you had pinned down all the issues for transfer of preserved benefits from a defined benefit scheme along came a couple more – how strong is the employer&#39s covenant, and how might the cash equivalent transfer value (CETV) basis change over the next few years? Until quite recently, a DB benefit […]

The chips are down

Like a lot of investment, traded endowment policies look simple on the surface. Either as a tax-efficient savings vehicle or a low-risk investment, Teps are useful for many medium to long-term needs, including retirement. But they may not be as simple and efficient as they seem. Towry Law product research manager Simon Farrant thinks buying […]

The Merchants Trust PLC – April 2017

Welcome to the latest update for The Merchants Trust PLC from the Trust’s portfolio manager, Simon Gergel. Portfolio Review The Merchants Trust reported results this month and the directors were pleased to announce a 35th consecutive year of dividend growth (subject to shareholder approval at the AGM). The Company is proud to be highlighted as […]

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