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Neville James harnesses teps and zeros




Type: Oeic.

Aim: Growth by investing in TEPs and zero dividend preference shares.

Minimum investment: £5,000.

Place of registration: Isle of Man.

Investment split: Initially 50 per cent in TEPs, 50 per cent in zero dividend preference shares.

Isa link: No.

Charges: Annual – A shares 1.225 per cent, B shares 0.975 per cent.

Redemption charge 0.5 per cent of dealing price.

Commission: Initial 0-5 per cent, renewal 0.25 per cent for A shares only.

Tel: 01243 520020.

Terry Stevens, proprietor, Centre Financial Services

Kenneth Ball, proprietor, KJ Ball Financial Services

Barry Laymond, senior practitioner, Barry Laymond Financial Services

Bruce Bulgin, partner, Chadney Bulgin.

Suitability to market 7.3

Investment strategy 8.3

Past performance 6.8

Company’s reputation 7.0

Charges 7.8

Commission 6.3

Product literature 7.8

Neville James has introduced the secure capital growth fund, an offshore open-ended investment company that invests in traded endowment policies (TEPs) and zero dividend preference shares.

Looking at how the fund fits into the market, Ball is enthusiastic. He says: "It is excellent for the risk averse investor looking for capital growth with minimal downside risk."

Bulgin says: "This is for sophisticated investors wishing to capture capital gains in a flexible and secure manner."

Stevens says: "The product fits into the market very well. There are not so many players in this area anyway, but this may well change as more policies become available. The unfounded negative publicity on endowments means that more people will make unnecessary surrenders and let other investors in these types of investments benefit."

Laymond however is less positive. He says: "This is another product in what is becoming a crowded market."

Turning to the type of client that the product is suitable for, Stevens says: "This is for low-risk long term investors, and for those who have used up their Isa allowance and want low risk tax-efficient income-producing investments."

Laymond thinks that the fund is for those whose attitude to risk is low and cautious, while Bulgin says: "This is for anyone looking for secure capital growth and who is not averse to investing offshore."

Ball identifies two types of potential clients. He says: "Firstly, this is for clients investing for growth to enable later retirement planning income by cashing within annual capital gains tax (CGT) limits. Secondly, it is for clients investing for children or grandchildren’s future educational needs, weddings, or other plans."

Looking at the marketing opportunities that the product provides, the panel differ. Stevens says: "We all need to be aware of the availability of new style investments and this is where seekers of independent advice will benefit. Only the informed client will get to know. This type of specialist or niche product is valuable for the IFA."

Ball says: "There is a broad spread of clients looking for risk averse growth. This may also be marketed to some clients requiring regular income."

Laymond however disagrees. He says: "This will have limited appeal, unless the client wants to accept low returns for the security."


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