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National Savings enters GEB race

National Savings and Investments has introduced its first guaranteed equity bond following the company&#39s recent revamp.

The bond is linked to the FTSE 100 index for a five-year term and offers 100 per capital protection, whatever happens to the index during that period. If the index increases by up to 65 per cent, investors get all this growth. But if the index increases by more than that, any growth for investors is capped at 65 per cent.

To calculate the final return, the average daily closing index of the first five days of the term is taken as the start date. This is compared with the average daily closing level of the FTSE 100 over the last six months of the term.

This guaranteed equity bond offers full capital protection, unlike some bonds which offer capital protection unless the index falls beyond a certain point. This makes it more appealing to investors at the more cautious end of the spectrum.

NDF&#39s recovery growth plan 2 is an example of a bond that imposes a condition on the capital protection. This bond is also linked to the FTSE 100 index and returns investors&#39 original capital at the end of the five-year term unless the FTSE 100 index falls below 50 per cent without recovering. But growth is not restricted by a cap like the National Savings & Investment bond, which could make it more attractive to investors who think the stockmarket is going through an upward cycle.


Accessory before the fact-find

At a recent IFA UK event, I asked a group of IFAs to tell me if they enjoyed fact-finding. One IFA out of 50 raised his hand. Either IFAs in the Newcastle area were suffering from a rare case of mass shyness or the majority did not, indeed, enjoy the fact-finding part of their job.As […]

Pima warns on means test hitting child funds

The Pep & Isa Managers&#39 Association has warned the Government against being too heavy on means-testing child trust funds.In an article for Money Marketing this week, Pima chairman Tony Vine-Lott says the trade body is uncomfortable with the idea of an “undefined degree of means-testing”.In its consultation paper, Savings & Assets for All, the Treasury […]

Clerical widens pension access to funds

Clerical Medical’s stakeholder pensions will now be able to access its full range of 22 funds. When launched only seven core funds were available but now the fund range includes property, cash, non-equity managed, European and UK smaller companies amongst others. It is also making Futureproof Contribution Protection Policy, its waiver of premium policy, available […]

Out for the discount

In concluding this series, I will look at the tax position of cashbacks and discounts.A cashback is defined as “an inducement to enter into a transaction for the purchase of goods, investments or services and is received as a direct consequence of having entered into that transaction”. It is usually paid as a lump sum.Let […]

State of the markets: global growth

In conversation with journalist Alexis Xydias, Artemis Global Growth Fund manager Peter Saacke discusses the state of global markets and how he is positioning his fund. Peter gives his views on the growth potential of US, Europe and emerging markets, each of which is on a different stage of the road to recovery. And with a […]


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