premier income & growth II plan pays 3% initial commission and offers 0.6% monthly income
Premier Fund Managers this week launches a four-year protected product offering 7.5% annual income or 42% total return.
The Premier Income & Growth II plan pays 3% initial commission and offers a monthly income option of 0.6%. The product is a closed-ended investment company listed on the Dublin Stock Exchange. It is available for Isa and Pep transfers with a minimum investment of £7,000. It is also available for direct investments.
The offer period lasts from 20 May to 12 July. Investors' capital return is linked to the performance of the FTSE 100 index over the four-year investment period, which begins in mid July. Investors receive a full return of original outlay, in addition to any income or growth, provided the index doesn't fall below 25% of its starting level.
If the FTSE 100 is 25% below its start level at the end of the product's life, capital return to investors is reduced by 2% for every 1% fall in the index. Thus, if the index is 26% lower, investors will lose 52%.
The final level of the product is calculated during the last six weeks of its life. During this period, the lowest recorded level of the FTSE 100 is taken as the product's end point value. If the index drops more than 25% but then recovers, full return of capital will still be provided.
The UK Income & Growth Plan also has a lock-in feature. This means should the FTSE 100 Index reached a level 40% higher than its starting value during the investment period, the capital return is locked in to maturity, regardless of subsequent market movements.
Simon Weldon, sales and marketing director at Premier, said: 'This feature addresses a concern expressed by investors and commentators alike, providing tangible benefits in the case of stock market recovery. With the FTSE 100 at historically low levels, this feature would kick in at a level not much higher than that reached at the end of 1999.'
Early investors in the product will receive interest at a rate of 5% per year until the start of the investment period. Jonathan Fry, managing director at Premier, said: 'With the current low interest rates available, many investors are desperately keen to boost their income, yet stock market uncertainties are holding them back from investing. This plan provides the ideal balance between a high return, whether income or growth, on the one hand and downside protection of capital on the other.'
The product is a follow-up to the five-year UK Income & Growth Plan launched in February that raised around £16m.
Contact: 0800 212-577.
Michael O’Brien and Sandip Patodia taking over
Neil Brown appointed interim head of UK wholesale distribution
Whose rules OK?
Latest news and analysis
To focus on STAR