Legal & General's protected portfolio is a capital protected individual
savings account (Isa) aimed at cautious investors who still want to
invest in the stockmarket but who want the reassurance of some
protection for their money.
Capital will be invested over five years in zero dividend coupons from
a portfolio of 30 stocks chosen from 200 of the biggest companies in
These will include companies such as Logica, Next, Vodafone,
British Airways, Dixons, Glaxo SmithKline, Hilton and BSkyB, covering
a wide range of sectors. Each company has been selected for its
potential for growth.
Legal & General will calculate the return on the performance of the 30
stocks over the five-year period, with the amount of growth of each
stock limited to 100 per cent. At the end of the five years the total of
the return of the 30 stocks will be divided by 30 to work out the return.
If the total return is negative then the minimum that the investor
receives will be the return of their original capital.
However, this is only available if the investor stays in the product for
the full five years. If they pull out of it before this point, then they might
not get their original capital back, although there are no other
The Legal & General product is similar to the Bristol & West five-year
GEB Isa, which is also a capital protected Isa. This invests in the
FTSE 100, Eurostoxx 50 and Nikkei 225 indices and also returns the
capital at the end of five years. However, Legal & Generals product
allows up to 100 per cent of growth, while the Bristol & West Isa only
allows up to 70 per cent growth.