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Prudential unveils capital protected growth plan

Prudential has introduced the capital protected growth plan, a capital-protected bond that will return investors&#39 original capital whatever happens to the FTSE 100 index during the six-year term.

The bond also has a choice of two growth options but the returns from both are based on the closing level of the FTSE 100 index on December 10, 2003 compared with an average over the last 12 months of the term.

Growth option one offers 100 per cent of the growth in the index up to maximum of 65 per cent. This means that if the FTSE 100 index grows by 66 per cent or more, investors will receive 65 per cent growth.

Growth option two provides 85 per cent of any growth in the index during the six-year term. Unlike growth option one, this is uncapped but the participation rate of 85 per cent means investors never receive all the growth in the index. The way each option works means investors with growth option two would need the index to rise by at least 77 per cent to exceed the potential returns available under growth option one.

An alternative to caps and participation rates is the cliquet structure used in Staffordshire Building Society&#39s secure capital account. This limits gains and losses to 10 per cent each year, providing a maximum return of up to 160 per cent &#45 but this could be hard to achieve.

However, investors with the Staffordshire plan receive a minimum return of 110 per cent, which is 10 per cent more than the Prudential product. This means the Staffordshire plan will be better for investors than the Prudential product if there is no growth, but an extra 10 per cent is unlikely to make a major difference to investors over a six-year term.


Elderly client is stranded by AMP

AMP Pearl has left an elderly client stranded after stopping door-to-door collection of premiums for industrial branch policies.Ogilvie Robbie, 77, from Birkhill, near Dundee, took out a whole of life policy in 1990, paying £65 a year. The collection service was suspended in April this year and paying premiums for Robbie, a former farm worker […]

Scottish Equitable International (Dublin) – Private Client Portfolio Capital Redemption Bond

Type: Unit-linked bond Aim: Growth by investing in Scottish Equitable International funds and external Oeics or unit trusts from any mainstream fund manager Minimum investment: £75,000 Fund links: Choice of 26 Scottish Equitable International funds and external Oeics or unit trusts from any mainstream fund manager Options: Initial costing, five-year costing, ongoing costingAllocation rates: Initial […]

Pru goes on the road with with-profits show

Should I Be Recommending With-profits to my Clients is the emphasis of a Prudential with-profits roadshow hitting the country from September 25.Eighteen seminars are to be held, beginning in Reading, with the aim of fully explaining how the Prudential manages its with-profits funds and giving advisers the chance to question the actuary and fund managers […]

&#39Government is new Maxwell on pensions&#39

The TUC this week accused the Government of behaving like Robert Maxwell over its handling of the pension crisis and called for a concerted campaign against No 10 until the situation has been resolved.At the TUC annual congress in Brighton this week, Association of Teachers and Lecturers deputy general secretary Gerald Imison said the Government […]


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