The Prudential has developed a five-year structured Isa offering guaranteed growth and an element of...
The Prudential has developed a five-year structured Isa offering guaranteed growth and an element of capital protection.
Called the Prudential Growth and Income Plan, the product is available through an Isa, direct investment or as a transfer from a Pep or Isa, and offers intermediaries 3% commission.
Charges are not explicit and are included in the make-up of the product.
Minimum investment is £7,000 and maximum investment is set at £1m.
Distribution of the product will be solely through intermediaries. The six-week offer period starts on 28 October and runs to 6 December, with investment commencing on 13 January.
A choice of 8% annual income, 0.62% monthly income or 42% growth is offered. The Growth and Income Plan has a number of in-built safeguards for capital return. The first is that year one of investment is a free period where no stock market moves count towards capital erosion.
All invested capital is returned if during the observation period ' 13 January, 2004 to 28 November, 2007 ' the FTSE 100 does not fall below 75% of the closing level at the start of the investment period. Should the FTSE 100 fall below this level then the first safety zone has been breached and invested capital is eroded on a one for one basis.
The second safety zone is breached if the FTSE 100 falls below 60% of the closing level at investment date any time during the observation period. Capital is then eroded on a two for one basis.
Should the FTSE 100 recover to the level it was at on the investment date in the last six weeks of investment and does not decline again, then 100% of capital is returned. Income or growth (depending on option chosen) is guaranteed at all times.
The Prudential is actively looking to develop further structured Isas next year.
Has been cold-calling consumers
New shares admitted to London Stock Exchange
Slow and steady growth
Missed funding target by £240,000
Denies any wrongdoing