Newton links protected plan to high-income fund

Newton is aiming to raise £50m with a capital-protected

structured product linked to the performance of its £750m

higher-income fund.

The Newton protected higher-income plan is designed to return at

least 100 per cent of investors&#39 capital by decreasing exposure to

the fund in falling markets and increasing exposure in rising markets.

For every rise or fall, inv-estors&#39 exposure to cash will change. If

the fund plummets, investors could have 90 per cent exposure to cash

but if it outperforms, they could have a maximum of 150 per cent of

the plan&#39s value exposed to the fund by borrowing against the plan&#39s

future returns.

The higher-income fund is managed by Clive Beagles and is currently

ranked 11th out of 67 funds in the UK equity income sector.

It is up by 17.34 per cent against the sector average of -4.89 per

cent over the last five years.

The plan will be distributed by sister company Mellon Global

Investments. Minimum investment is £5,000. Initial commission is

3 per cent, with 0.5 per cent trail. There is no initial charge.

Mellon Global Investments head of UK distribution Simon Wombwell

says: “Investors can have exposure to one of the most attractive

equity-linked investments available while maintaining capital

protection.”

Chartwell Investment Management investment analyst Ryan Hughes says:

“It is quite a novel product and I like the idea of it not being

linked to an index. If Newton gets it right, it should work

perfectly.”