View more on these topics

Product matters

Quite why New Star feels the need to launch structured products on to a crowded market is beyond me at the present time.

A firm that raises £800m in one year does not need the extra few million pounds that this sort of product raises.

The income or protected capital plan is similar to many other structured products on the market.

This one offers the choice of income or growth – 10 per cent annual income or a maximum of 55 per cent growth over the five-year term.

It use the 50 stocks of the Dow Jones Global Titans index as its base.

The problem with many of these investments is that it is not,in theory, difficult to lose money.

If you are basing an investment on a set basket of 50 stocks, and only five (or six with the growth option) can be more than 30 per cent down, there is a fair chance that investors could lose money.

Just look at how many of the FTSE 100 have lost that and more in the last few years, Marconi and Colt are just two examples.

Income-seekers have to get used to the fact that wanting 10 per cent income puts a considerable strain on capital preservation.

Growth investors should remember that New Star have assembled a team of quality active fund managers. Investors who want stockmarket exposure through New Star for the long term should invest with quality managers such as Tim Steer, Toby Thompson and Stephen Whittaker rather than invest in structured products.

Ben Yearsley is an investment manager at Hargreaves Lansdown

Recommended

FSA consumer body calls for Government to fund advice service

The Financial Services Consumer Panel is calling on the industry and Government to fund a central advice service to point lower income earners to safe haven products. The Panel is telling the Government and the FSA that only a centrally funded free financial planning service can offer financial advice to all. It wants the cost […]

Close unit trust mimics VCT

Close Venture Management, the venture capital trust division of Close Brothers, has established an offshore unit trust that invests mainly in property within the hotel, care home and residential sectors. The healthcare and leisure property trust was designed in conjunction with Close Property investment. It aims to provide income of 7.5 per cent a year […]

Investment view

So the 5,000 level on the FTSE 100 Index turned out not to be a barrier after all. The relentless sideways movement of the market was finally broken on the downside. Whether this is a brief excursion into the murky territory reached in the aftermath of last September&#39s terrorist attacks, it is difficult to say […]

Hiscox launches holiday home insurance

Hiscox Direct has launched holiday insurance enable people to get cover for their properties abroad without having to go for an foreign company or a policy written in a foreign language. Because of the length of time many properties are vacant many UK companies refuse to provide cover for holiday homes abroad. Benefits of the […]

Neptune India: three stocks we’re buying & the one we’re not

By Kunal Desai, Head of Indian Equities The Neptune India Fund’s investment process serves as a key differentiating feature of the portfolio versus its peers, contributing to its significant outperformance under Manager Kunal Desai’s tenure. Focusing on industry disruption, accounting quality, liquidity and corporate governance, Kunal sets out three stocks that he’s buying in the […]

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