A new plan from Meteor (www.meteoram.com) called the Pendulum commodities plan looks very attractive to me.
Investing directly in commodities can be very dangerous but this plan invests in a basket of commodity indices to give a guaranteed return of 15 per cent over six years and two weeks, with an additional 1 per cent for every 1 per cent rise above 15 per cent up to 50 per cent, and 1.25 per cent for each 1 per cent above 50 per cent with no upper limit.
It also provides a hedge against a drop in value. If the basket of commodities falls by more than 30 per cent, the investor gets a 0.5 per cent return for each 1 per cent additional drop in value.
The plan is based on five Standard & Poor’s GSCI Official Close Excess Return indices linked to precious metals, industrial metals, energy, agriculture and livestock. Over the six years to July , this basket of indices rose by 90 per cent. Past performance is, of course, not a guide to future performance but, with China and India becoming more wealthy, demand for commodities is increasing.
Minimum investment is £10,000. The plan is proving very popular for self-invested personal pensions because the returns are tax-free. Direct investors will be subject to capital gains tax but the £9,200 annual exemption is likely to rise, so this could be an excellent method for diversifying bigger portfolios.
The capital is secured through assets provided by a major investment bank with a high S&P rating. This is one of the few investments available with a secure return and chance of making a lot of money.