Nationwide's Protected Equity Bond

philbostavros

Hi

I was in Nationwide, looking at what to do with my 1 Year ISA Bond, which is just maturing.

Their advisor suggested the 6 year Protected Equity Bond (transfering in my current cash ISA savings and I plan to invest another £20k.

You can chose whether to wrap in the cash ISA or not and it guarantees min of 11% gross return on investment with possibility of up to 50% gross return on investment on maturity.

http://www.nationwide.co.uk/investments/protected-equity-bonds/

Anyone else considering this?

Regards

opinions4u

No.

It's a load of rubbish that caps your potential return but allows you to get less back than if you'd saved in a normal cash ISA.

RayWolfe

philbostavros wrote: »

it guarantees min of 11% gross return on investment

Over how many years?
... bad product!

dunstonh

Rubbish terms wrapped up in a product that is designed to be sold by low skilled staff to low knowledge customers.

Terms are easily beaten elsewhere if you really want one of these products. However, take time to see a real adviser or learn it yourself and you will probably find that you will prefer alternative ways to invest.

tushingham

just stopped my dad investing in this as he believed the salesman hype from the chap at nationwide.

he does like this type of product with a guaranteed equity and the opportunity of at least some gains.
can anyone recommend one of the better structured products out there?

thanks
t

JanetAS

Uh oooooo! I've opened one of these this morning!!

I had a GEB which matured last week and thought the return was quite good. It was guaranteed 10% and it made just over 12%.

Why is this considered rubbish? Thanks.

Aegis

JanetAS wrote: »

Uh oooooo! I've opened one of these this morning!!

I had a GEB which matured last week and thought the return was quite good. It was guaranteed 10% and it made just over 12%.

Why is this considered rubbish? Thanks.

How long was that over?

dunstonh

I had a GEB which matured last week and thought the return was quite good. It was guaranteed 10% and it made just over 12%.

Is that 12% over 5 or 6 years?

Compare it to say Inv Perp Monthly Income plus fund which returned 41.45% over 5 years (or 57.57% over 6 years). Most of which came from the income (reinvested). How does that compare to the income you get on yours (clue - you dont get any).

Why is this considered rubbish?

Because they are expensive (although charges are implicit not explicit). You dont get any income. They are usually based on the FTSE100 which has been an awful index to track and typically remains so. They often have caps or restrictions on growth.

You get some good ones every few years but generally they are poor value. The worst ones are those offered by most of the banks. The whole of market or institutional ones tend to be better.

However, back to my post #4, once you realise how they work and what you are missing out on then you will often back down on these and invest properly or even build your own GEB.