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Novel combination from Nvesta


Momentum Tracker Plan 2

Type: Capital-protected bond

Aim: Growth linked to the performance of the FTSE 100, iBoxx Sterling Gilt Index and DJ-AIG Commodities indices

Minimum-maximum investment: 4,000-no maximum, Isa 7,000

Term: Six years

Return: 100% of the weighted growth in the FTSE 100, iBoxx Sterling Gilt Index and DJ-AIG Commodities Index

Guarantee: Original capital returned in full regardless of the performance of the indices

Closing date: November 18, 2005, November 4, 2005 for Pep/Isa transfers

Commission: Initial 3% or initial 2% plus 0.25% renewal

Tel: 020 7454 0704

Nvestas momentum tracker plan two provides exposure to equities, glts and commodities through a basket of three indices over a six-year term.

Assessing the marketing opportunities for this product Baronworth director Colin Jackson says: Nvesta, formerly Eurolife is continuing to receive bad press following the fiasco relating to the Eurolife secured income bond Isa. Until this goes away, and it may take many years for this to happen, there could well be many IFAs who will not recommend or mail their clients with Nvesta products.

Jackson feels this product does not offer anything particularly good for IFAs. The only advantage to their clients is the capital protection, but this is available from other providers, he says.

Jacksons main concern is that apart from the FTSE 100, the vast majority of investors would never have heard of the iBOXX Sterling Gilt Index or the DJ-AIG Commodities Index. This could be a major turn off for would-be investors, he says.

He also points out that direct investments are subject to income tax. But he says it is better to have the return subject to capital gains tax which means that anybody that does not use their CGT allowance will be able to obtain all or part of the returns free of tax and save their Isa allowance for something else.

Assessing the possible competitors for this product Jackson says: We have not come across any products utilising this combination of indices which is probably a good thing.


Suitability to market: Poor
Investment strategy: Average
Adviser remuneration: Average
Overall 1/10


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