Arc Capital & Income today announced a capital protected bricks and mortar fund based on the Halifax House Price Index (HPI).
The fund will produce a profit even if the index falls by 30% from the start of the plan, with no cap on upward growth.
The plan has a six year term starting from 29 August 2008, and performance is measured with reference to 70% of the HPI at the start of the plan.
Furthermore, if the index rises, then growth will equal the rise in the HPI plus 30%, with no cap on returns.
If the index does fall below 70% of its initial value, then no growth will be paid but capital will be returned in full.
Christopher Powell, head of product development at Arc, says: “Clearly the short term view of the residential market is quite gloomy and it is predicted that it might go down by some 15% or so during the coming twelve months.
“But once the lenders have refinanced, we believe that the mortgage market will become more ‘friendly’ to borrowers. In addition, there is clearly a strong underlying demand for residential property, which is not being fulfilled, and it therefore seems likely that this will fuel property prices once funds become more readily available.”
The fund is available for direct investment, ISAs and SIPPs, and to individuals, companies, pension funds and charities.
Minimum investment is £3,600, with a maximum of £2m, and the plan will pay interest at 4% from receipt of funds until the beginning of the plan. IFAs receive 3% commission.
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