View more on these topics

Newcastle bond tracks property market

Newcastle Building Society has put a different slant on guaranteed

bonds with its guaranteed property bond.

The bond was designed to allow investors to benefit from a rising

property market, rather than gamble with potential growth on volatile

stockmarkets. It works in a similar way to guaranteed equity bonds,

but is linked to the performance of the Halifax House Price Index

rather than a stockmarket index.

Investors can choose from two versions of the bond, a three-year

version or a five-year version. To calculate the final returns, the level

of the House Prices Index is recorded at the start of the term and

again at the end of the term. The three-year bond offers 100 per cent

of any rise in the index, while the five-year bond offers 120 per cent of

any rise in the index. Both versions guarantee the return of the

original capital.

The bond could suit people who are keen to invest in residential

property without the risk to capital that property funds can pose, and

without the responsibilities that go with buying property to let. It also

enables Sipp investors to gain exposure to residential property.

Sipps allow investment in commercial property only, so the bond,

which is classed as a cash deposit bond, could allow investors to

diversify through indirect exposure to residential property.

Linking returns to house prices is an interesting concept that

Britannia International is also exploring with its double index growth

bond for expat investors. Property prices have shot upwards at a

rapid rate in recent years, but some investors may feel it is only a

matter of time before it starts to slow down as interest rates rise.

Recommended

Death of Sue Connolly

AMP NPI senior pension adviser Sue Connolly died recently at the age of 42.She worked for the company for almost 24 years, the last 14 years in its technical advisory service.Sue was well respected in the industry for her pension expertise and represented her company on various industry bodies. She was a Fellow of the […]

Large cap logic from Old Mutual

Old Mutual Fund Managers has designed the Old Mutual select large cap fund to fill a gap in its product range, The company already has a UK small cap and a UK mid cap fund, so a large cap fund was the next logical step. This unit trust will invest in around 40 larger companies […]

Verity&#39s view

When the Inland Revenue brought its consultation on annuities to a close, it left many IFAs and their clients disappointed.From the start, its refusal to review the compulsory purchase of annuities at the age of 75 looked dogmatic and inflexible, a throwback to the days when bureaucrats knew better than the average member of the […]

The Mortgage Business lifetime tracker

The Mortgage Business lifetime trackerTracker term: SVR for the life of the loanTracker rate: 5.84% (SVR)Minimum loan: £35,000Maximum loan: £150,000 up to 100% LTV Income multiples: 3 x principal plus 1, 2.5 x jointArrangement fee: £299Redemption fee: Three months&#39 gross interest in year one, two months&#39 in year two, one month&#39s in year threeConditions: Available […]

The Natixis Solution: H2O MultiReturns Fund

A product designed to bring some unique attributes to the crowded absolute return global macro space With diversification and risk management top of investors’ wish lists when it comes to alternatives, step forward the H2O MultiReturns Fund. H2O Asset Management is an independent boutique backed by Natixis Global Asset Management and has a 14-year track […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    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

    Email: customerservices@moneymarketing.com