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On the right tracker

Arc Capital & Income plc is offering a new version of its bull & bear tracker plan. This product makes a profit for investors, whether the stockmarket rises or falls, and there is a 100 per cent return of capital when the plan matures at the end of six years.

The only circumstances where investors will not make a profit is if the index ends exactly where it started or if the index falls during the period by more than 50 per cent and the final level is equal or below the initial level. Even then, the capital is secure.

It is linked to the FTSE 100 index and if it goes up over the next six years, the profit will be equal to all the increase. If, on the other hand, the index goes down by up to 50 per cent, the profit will be equal to the full amount of the percentage fall. The 100 per cent capital return is not dependent on the performance of the index.

To take some examples, if the FTSE 100 index rises by 100 per cent over the period, then the investor will get back 200 per cent of the initial investment.

If the index is exactly the same, which is at least a 100-1 chance,the investor will get back his initial investment but no profit.

If the index falls by 50 per cent, then the investor will get a return of 150 per cent of the initial investment but if the index falls by more than 50 per cent at any time and does not recover, then there will be no investment profit and the investor will just get back 100 per cent of their initial investment.

With the stockmarket at a fairly high level, this investment is ideal for the cautious or pessimistic investor. It can be invested in through Isas, pension funds and trusts and also as a direct investment where the profits would be subject to capital gains tax under existing legislation.

This is an ideal investment as part of every portfolio where income is not required.


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