Guernsey-based investment specialist Manor Park has introduced the guaranteed UK capital growth fund.
The fund is an investment trust that will invest in the FTSE 100 index over a five-year term, and is guaranteed to return the capital at the end of the term. The fund is aimed at cautious investors.
The return that an investor can expect will depend on their attitude to risk. The very cautious investor can choose to protect 110 per cent of their investment and take 50 per cent of any growth in the FTSE 100. Alternatively the slightly cautious investor can protect 85 per cent of their investment and take up to 175 per cent of any growth in the index.
In the event that the FTSE 100 index falls, investors will get at least the amount of their guaranteed capital back. This will be protected by being invested in fixed interest securities and bonds with a rating of AA and above.
The beginning of 2001 saw widespread fears of recession in many countries with indices such as the FTSE 100, Dow and Nasdaq 100 all falling sharply. This volatility could encourage cautious investors to invest in the Manor Park fund as they could be attracted by the capital guarantee.
Over a five-year period the FTSE 100 index went from 3,707.3 points on May 8, 1996 to 5,886.4 points on May 8, 2001.