A & L guaranteed capital plus

judip43

I've just been offered a A & L guaranteed capital plus, I have to tie up my money for five and a half years it offers maximum return of 26% with min of 2%.

26% of original investment if FTSE 100 index has increased by any amount (commencemnt date 10th march 2009) 2% if FTSE goes down or stays the same
the starting level of FTSE 100 will be taken at commencement date

the final level is the average of the daily closing levels over the last 6 months of the investment

I have £25,000 to invest and have 2 questions

1. Is the above a good investment risk
2. shold i invest all the £25,000 or take another offer which is i place 50% in the guaranteed capital plus and50% in fixed rate savings for 1 year at 5.5%

they also have a guaranteed capital plus 3 and a half year account at maximum return of 12% with min 1%

gozomark

26% over 5.5 years = 4.3% pa - thats the most you will make, and you won't be able to touch your money for 5 1/2 years - sounds like an awful investment to me...

thrupence

judip43 wrote: »

I've just been offered a A & L guaranteed capital plus, I have to tie up my money for five and a half years it offers maximum return of 26% with min of 2%.

26% of original investment if FTSE 100 index has increased by any amount (commencemnt date 10th march 2009) 2% if FTSE goes down or stays the same
the starting level of FTSE 100 will be taken at commencement date

the final level is the average of the daily closing levels over the last 6 months of the investment

I have £25,000 to invest and have 2 questions

1. Is the above a good investment risk
2. shold i invest all the £25,000 or take another offer which is i place 50% in the guaranteed capital plus and50% in fixed rate savings for 1 year at 5.5%

they also have a guaranteed capital plus 3 and a half year account at maximum return of 12% with min 1%

The conservative expectation would be that interest rates will rise over the next 5 years, to put it mildly. :rolleyes:

Now is not the time to be committing to any locked-in investments, particularly when they're as useless as that.

Loads of downside but no upside to compensate for it.

dunstonh

Rubbish product with rubbish terms. I dont think I have seen a bank issue a decent GEB in over 13 years now. Of course they dont have to issue decent terms as they get enough people buying their rubbish.

There are better options available.

simon_templar_2

This product has won the MoneyWise award for structured products recently. Most savings accounts or bonds are not offering anywhere like the potential returns. Descriptions such as rubbish and awful are a bit over the top.

gozomark

4.3% pa max return over 5.5 years, and it won an award !!! - hate to see what it beat...


lets assume there is a 10% likelihood that the market actually falls over the period - that reduces the expected return to under 4% pa

judip43

thanks for the replies...... go on then, what would you do if you had 25k spare, any advice will be welcomed

tonygee_3

doesnt float my boat

gozomark

judip43 wrote: »

thanks for the replies...... go on then, what would you do if you had 25k spare, any advice will be welcomed

when is the earliest you might need the money ?
are you prepared to lose any of it ?

simon_templar_2

It won the award late last year when the return was 35% :dance:

judip43

i didn't think it was that good for the length of time it was tied up for, but the advisor was thrilled by it!! and i thought perhaps the headache i still have from being rear ended last night and subsequent whiplash that was confusing me :rotfl: