Foreign & Colonial is seeking FSA approval for its With Prospects fund, a remodel of a with-profits ...
Foreign & Colonial is seeking FSA approval for its With Prospects fund, a remodel of a with-profits product through a mutual fund structure.
The group is looking to use an Oeic to provide the underlying vehicle with a far greater degree of transparency on the way annual bonuses are created.
The fund, which would be Isable and Pepable, would offer exposure to equities and bonds.
With Prospects is a follow up to F&C's Blue Fund, launched in February, which has the objective to produce a stable annual growth rate of around 5.5% through an underlying portfolio of high quality overseas bonds, direct investments in European equities and derivatives.
The portfolio of Blue is contained within an Oeicstructure.
Investors who want income can sell shares in the Oeic, and 95% of this income taken through share sales will be counted as return of capital and 5% will be counted as capital gains, so it is liable to CGT not income tax.
As long as the portion liable for CGT is less than the £7,200 CGT allowance for the year it also effectively tax-free. Over time taper relief reduces CGT liabilities even further.
Over three months to 31 July 2001 on a bid to bid basis, Blue is ranked second out of 21 in the Cautious Managed sector, returning -0.7% compared with the sector average -3%.Investment Week 13 August 2001
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