Thesecapital-protected funds are linked to the performance of the FTSE 100 index over a three-year and five-year term respectively. Both provide investors with a choice of capital protection and return.
The guaranteed UK selected growth fund provides a choice of 125, 90, 55 or 20 per cent of the growth in the index, known as the participation rate, at the end of a three-year term. The higher the participation rate, the lower the capital protection within a range of 85 per cent to 100 per cent. For example, a participation rate of 125 per cent of the growth in the index provides 85 per cent capital protection, while 20 per cent growth in the index comes with 100 per cent capital protection.
The guaranteed UK capital growth fund provides a choice of170, 140, 110, 80, 50 or 20 per cent of the growth in the FTSE 100 index after five years. It works in the same basis as the guaranteed UK selected growth fund, providing capital protection within a range of 85 to 110 per cent.
To calculate the returns from both products, the closing level of the FTSE 100 index at the start of the term is measured against the average monthly values taken over the entire term. Where there is no growth in the index, investors get the percentage of capital that they protected at the start of the term.
The Manor Park funds recognise that investors have different attitudes to risk , which could be useful to IFAs because it will allow them to cater for a range of clients using a single product..
However, the use of averaging may constrain the level of index growth, but Manor Park says this is balanced by offering higher participation rates than would be possible if a single index level at the end of the investment period was used to calculate the index growth.