View more on these topics

NDF recovers a second time

NDF Administration has introduced the second issue of its recovery growth plan, a guaranteed equity bond that allows investors to receive 100 per cent of any rise in the FTSE 100 index over a five-year term.

Investors will also get their original capital returned in full unless the FTSE 100 index falls by more than 50 per cent during the term without recovering to at least its starting value by the end of the term. The starting value of the index is defined as its closing value on May 29, 2002. This is compared to the final level, which is the lowest closing level of the index between April 29 and May 30, 2007.

If the index falls by more than 50 per cent and fails to recover by the end of the term, investors&#39 capital is reduced by 1 per cent for each 1 per cent fall in the index.

Some five-year guaranteed equity bonds such as National Savings and Investments&#39 recent offering, provide 100 per cent capital protection whatever happens to the chosen index. The NDF product is riskier because the capital guarantee is dependent on the index reaching a certain level in five years&#39 time.

However, the National Savings and Investments bond caps the final return at 65 per cent of any growth in the FTSE 100. The NDF bond compares favourably in this respect as growth is not capped. Investors trying to choose between them will need to decide how much capital protection they need and whether they are prepared to give up 35 per cent growth potential with National Savings and Investments.

Some may do so in return for greater capital protection than is offered by NDF Administration&#39s bond. But others may feel that NDF Administration is the better option if the stockmarket is entering a recovery period over the next five years.


Commonwealth sells off New World to West Brom

Commonwealth Bank of Australia is pulling out of the UK residential mortgage market after just over a year and is selling its NewWorld business to West Bromwich Building Society.The bank says after reviewing development opportunities in the UK it has decided to concentrate on fund management, under the First State Investment brand, and institutional banking.NewWorld […]

Pension world is full of unmarried couples

In my last article, I started to visit or revisit a number of pension developments relating to sexual relationships, in particular, the rights of partners of pension scheme members to benefits from that scheme.I would now like to develop this theme away from the issue of part-timers – involving sex discrimination, primarily against women, who […]

Gearing up for Tep deals

Tep market maker Policy Portfolio is publishing a guide explaining to IFAs the gearing process which enables investors to get more Teps for their money.Policy Portfolio says gearing is a relatively simple process but it believes it is a concept not many IFAs understand. It says UK and offshore banks will often lend up to […]

Lighthouse buys Berkeley Wodehouse in £2m deal

IFA Lighthouse Group and network Berkeley Wodehouse Associates are merging in a deal valued at £2.1m that sees two Lighthouse directors quit.Wealth management firm Lighthouse is paying for BWA in shares worth £2.1m in a reverse takeover as BWA has a higher turnover the Lighthouse.The deal sees BWA chief executive Malcolm Streat-field become joint managing […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm