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NDF plans for Isa season

The NDF 7 per cent fixed income plan February 07 is one of three new structured products NDF Administration has brought out for this year’s Isa season.

This plan aims to provide income of 7 per cent a year or 0.56 per cent a month linked to the performance of two indices – the FTSE 100 and Dow Jones Eurostoxx 50 indices. If both final index levels are at or above their initial levels, the product provides a full capital return at maturity.

If the final index level of at least one index is below its initial level, investors still get a full capital return at maturity unless one or both of the index has fallen by more than 40 per cent during the investment period and fails to recover to at least its initial level by the end of the term. If the safety net fails, the capital return is decreased by 1 per cent for every 1 per cent fall in the worst performing index over the term.

According to the structured products database on the SRP Adviser website, this product is unique. There are two offer products aiming to provide income, but neither provides a suitable comparison for the NDF product.

The problem income products face is that pricing issues for the underlying assets make it is difficult to reconcile an income objective with a sufficient level of protection. Offering a structured capital at risk product is one way of balancing these two features but this strategy is not suitable for people who are looking for a higher degree of capital protection than a 40 per cent safety net.

Unlike many other structured products, this NDF offering does not use averaging in the calculation of returns. While this means good performance at the end of the term will not be diluted, the potential drawback is that better periods of performance in the middle of the investment term will not count towards the final returns.


MetLife secures Sipp audience

The European arm of US-based MetLife has made its UK debut with the introduction of a self-invested personal pension and a related trustee investment plan.

Chris Gillies

Part of the Zurich community for over 20 years, the managing director of Zurich Intermediary Group plans to spend 2007 orchestrating a comprehensive e-platform and overseeing a new protection range designed to establish it as a major player. He also believes in helping the wider community as a keen supporter of charities for disabled and disadvantaged people. Interview by Helen Pow.

Hip providers in CML clash

The Association of Home Information Pack Providers has clashed with the Council of Mortgage Lenders over the CML’s delay in responding to the consultation on Hips.The CML wants Hips to be postponed until the results of initial test stages have been evaluated, accusing the Government of being slow to recognise the problems with local authority […]

Building up to disaster?

It is a good six months since the doomsayers started calling the top of the property market in earnest but figures from the Investment Management Association show property funds still powering ahead, representing more than 80 per cent of inflows into the specialist sector in 2006 with retail sales of £3.6bn.

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Auto-enrolment — don’t leave it too late…

With auto-enrolment (AE) well under way for the UK’s largest businesses, over the next three years an additional 800,000 smaller employers (with less than 60 employees) will start their journey to comply with the legislation. AE mandates all eligible employees and their respective employers to make regular pension contributions into a qualifying pension scheme. To learn more about the legislation read our brief Jelf AEase — simple steps to AE compliance guide.


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