Opinions on "Guaranteed Income and Capital Bond 2"

Legal and general are offering a mini cash ISA type investment as follows:

"You get an annual income of 5.3% gross/AER on half of your money for five years, while on the other half you receive 50% of any capital growth in the FTSE 100 Index. And don't forget, there is no risk to your capital if held for the full five years."

There are no other fees. It looks like a reasonable investment to me but I'm interested in other people's opinions. What do you think?

Reply to
spasmous
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I think all these sorts of things are CRAP !

If you don't want risk don't invest in the markets.

If you want to invest in the markets make sure you get the dividends as well as the change in capital value (in this case you are only getting 50% of any increase).

If you want some money held in cash and some in the markets it is very easy to do that yourself. (and you can get out of either separately at any time).

What you are doing here is paying your dividends and half your capital growth as an insurance against the FTSE being lower in 5 years time.

A TOTAL WASTE OF MONEY AND A VERY BAD INVESTMENT. (IHMO)

Reply to
Miss L. Toe

Thanks for your candid views! Hmm, let me do a quick calculation. Say I have 2000 invested, then 1000 earns 5.3% p/a and 1000 gets 50% of the increase in the FTSE. If I assume the FTSE will increase from 6000 to

9000 (50% increase) by 2011 then my initial 2000 will be 1,294.62 + 1250.00 = 2544.62 (27% over 5 years).

That's not so great after all. What suprises me most is that the FTSE portion gains less than the interest, even with fairly optimistic performance. What to do then - I have two cash ISAs that I want to transfer to a different provider, preferably with a stock component (100% if possible!).

Reply to
spasmous

You have one cash ISA transferred to a new provider.

Then cash the other one in and invest in shares: An ISA for shares only really has value if you are going to get close to CGT limits but most cost little or nothing extra anyway.

You just need to decide which market to put the shares money in. Then hunt for a suitable vehicle.

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Reply to
Miss L. Toe

Well, if you want 50% cash, 50% equity, leave half the money in a cash isa, and put the other half in a FTSE index tracker or similar.

Reply to
Jonathan Bryce

In message , Miss L. Toe writes

Wholeheartedly agree, but I claim my copyright fee of £100 cos I wrote the same thing here 10 years ago!

Reply to
John Boyle

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Reply to
Alan Frame

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