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ScotLife claims win over Virgin

Scottish Life International is claiming victory in its challenge to

Virgin and SG Asset Management over whose fund would perform best

over five years.

In 1998, SLI bet that its protected deposit bonus 95 fund would

outperform Vir-gin&#39s UK index-tracking fund and SGAM&#39s newly launched

UK growth fund, with the losing companies donating £6,000 to a

charity of the winner&#39s choice.

Despite much publicity, only Virgin – which has made good the bet –

accepted the challenge. Over the five-year period, SLI says Virgin&#39s

fund fell by 32.1 per cent, SGAM&#39s fund dropped by 38.27 per cent

while its fund was down by only 5.32 per cent.

SLI says the result shows that, in a bear market, protected funds are

a safer option than either passive or active funds. But Virgin says

it does not understand how SLI calculates its fund&#39s performance.

Virgin head of PR Sylvia Waycot says: “It is a very complicated

product and we are finding it very difficult to understand how SLI

works out the growth.

“If we are struggling, you have to wonder how investors are supposed

to understand it. But we have sent £6,000 to Save the Children.”

SLI investment marketing manager Richard James says: “Although the

focus is on the active versus passive debate, this shows that there

is a third way. In current conditions, protected funds mean a lot

more to investors.”


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