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Sarasin goes for comfort factor

SARASIN INVESTMENT MANAGEMENT

Sarasin Guaranteed Portfolio &#45 GlobalSar Principal Guaranteed Note

Type:
Capital-protected fund

Aim:
Growth linked to the performance of the Sarasin CI
GlobalSar sterling fund

Minimum investment:
Lump sum £7,000

Investment split
100% linked to the performance of the Sarasin CI
GlobalSar sterling fund

Term:
Five years

Place of registration:
Guernsey

Charges:
Initial 5%,
annual 1.5%

Commission:
Initial 3%,
renewal 0.25%

Closing date:
March 28, 2004

Tel: 020 7236 3366

The Sarasin guaranteed portfolio &#45 globalsar principal guaranteed note is a capital protected fund linked to the Sarasin CI globalsar sterling balanced fund, which is a Guernsey-based unit trust. The underlying fund invests globally in a combination of equities, bonds and cash and investors in this fund will get their original capital at the end of the term less the charges, plus 100 per cent growth and any income distributed by the underlying fund.

Positive Solutions IFA John Hill thinks there is a market for this type of fund. He says: “Many clients are looking for protected and guaranteed funds but most of my clients like to have the Financial Services and Markets Act 2000 to give further protection. This does not apply to the Sarasin fund if Rabobank, which provides the guarantee, collapses during the product term and the Financial Services Compensation scheme will not be available.”

Hill thinks the return of the original capital at the end of the five-year term is the fund&#39s best selling point. He likes the literature but points out that the client would have to understand how investing in a medium-term note works.

On the issue of charges, Hill thinks they are possibly too high and he feels the commission Sarasin offers is not really important as the main point is whether the product suits the client.

Hill says he would prefer a product that locks in profits made by the underlying fund. He adds: “The returns from this fund seem to suggest it follows the market, which could mean that when the market falls it is slow to switch to cash and bonds.”

Looking at products which are likely to compete with the Sarasin fund, Hill suggests the Sterling protected profits fund and Prudential&#39s protected fund. He concludes that some investors will be looking for something more than capital protection.

BROKER RATINGS:

Suitability to market: Average
Investment strategy: Average
Charges: Average
Adviser remuneration: Average
Overall 5/10

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