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MGM plan offers 110% guarantee

MGM Assurance is offering a structured product which guarantees the return of 110 per cent of the initial investment after its five-and-a-half-year lifespan.

The growth assured bond, which starts on June 30, will pay on maturity the greater of 110 per cent of the initial investment or 45 per cent growth in the value of the FTSE 100. There is no breach level which could affect the return and no upside limit.

Due to the guarantee, 85 per cent of the capital will be invested in a zero coupon bond issued by an institution – yet to be chosen – with at least an A credit rating from Standard & Poor&#39s. Taking into account charges, around 7-8 per cent of the remaining capital will be linked to the FTSE 100.

IFA general manager Ian Gilmour says: “It is a deliberately simple product – perfect for the investor with money on deposit who is looking for a greater return than paid by a bank or building society.”

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