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NDF offers mature approach

NDF Administration has introduced he NDF growth plan, a six-year guaranteed equity bond which has the potential to mature earlier.

Investors will get a full capital return regardless of the performance of the FSTE 100 index but any growth they receive on top of this will depend on the index
performance. If the index rises by at least 20 per cent in year two, investors will get 20 per cent growth, if it rises by at least 30 per cent in year three the growth will be 30 per cent, if it rises by at least 40 per cent in year four investors will get 40 per cent growth, if it rises by at least 50 per cent in year five there will be 50 per cent growth and if it runs full term investors will get 150 per cent of the rise in the index.

To calculate the returns if the product runs full term, the closing level of the FTSE 100 index is recorded on June 1, 2005 and is compared with an average produced between June 2, 2010 and May 27, 2011.

According to the Structured Retail Products website, similar products are currently available from Structured Solutions Group and Premier. Option one of the Structured Solutions Group product provides the best comparison to the NDF product as unlike the Premier product, a full capital return I provided regardless of the index performance.

The Structured Solutions Group offers lower returns overall but this is a reflection of the lower level of growth needed to achieve those returns. It offers 14 per cent growth if the FTSE 100 index rises by at least 7 per cent in year two, 21 per cent in year three if the index rises by at least 10.5 per cent, 28 per cent in year four of the index has risen by 14 per cent, 35 per cent growth if the index has risen by 17.5 per cent in year five and 100 per cent of the rise in the index plus 100 per cent of the capital.


The IFP’s View

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Neil Jones is Technical Support Manager with Canada Life’s ican Technical Services Team. Canada Life offers a range of wealth management solutions, including retirement income planning, estate planning and investment solutions from a choice of jurisdictions, including the UK, Isle of Man and Republic of Ireland. A trust can offer significant advantages when an individual is […]


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