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NU offering FTSE-linked bond in wake of falls

Norwich Union is targeting IFAs with a structured product linked to the FTSE 100 and guaranteeing a full return of capital after four years.

The Prosper guaranteed capital bond is the second version of a product previously distributed through its tied agents. It is being launched to take advantage of the market being at its lowest level for many years.

Growth is capped at 6.5 per cent every six months. If there is negative growth after four years, investors receive back their initial capital.

There is an early entry bonus of 0.35 per cent for investments before August 19. Commission is 3.5 per cent.

Investment propositions manager Richard Kelsall says: “The first product was successful and we feel it is a good time to get into the FTSE while it is at such a low level.”

Bates Investment head of research James Dalby says: “I am not overly impressed. With the market like it is, we could see some sharp rises but the product is capped at 6.5 per cent. Linking to the FTSE is a handicap and there is no minimum return.”

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