Guaranteed Investment Bonds

darren72

dunstonh wrote: »

If you are going to use your ISA allowance elsewhere then do that. If you arent going to use your ISA allowance at all then you should use this in the ISA. It may not be beneficial now but may be in future years. Remember the ISA allowance is a use it or lose it allowance.

Every year I always put the maximum allowed into a Cash ISA, and would prefer to continue to do so. With this one requiring a minimum of £5,000 it would only leave £2,200 available to put in a Cash ISA.

Under these circumstances, can you see any disadvantages to investing outside an ISA ?

Thanks

keepitreal_3

dunstonh wrote: »

I have advance notice of it so its not on their website yet. It will be shortly as issue 37. The website stops at issue 36. It is available from 15th Feb-7th April using an index price on 18th April.

http://www.premierassetmanagement.co.uk/Index1.html

Given the current saving rates available, is this offer to good to be true? because the element of risk does not seem that great, when lookin back at the previous years FT100.
I wonder how the fund will achieve this level of performance.
New to investing hence the query!

MoneyTown

This does seem appealing. I'm just worried how secure the whole thing is and what would happen if the company/backer became insolvent.

Does the FSA provide the £35,000 (or any other) protection on this ?

Inside the prospectus it says:

Assets
The benefits payable are linked to the value of assets arranged by a leading AA rated City Institution (as
measured by Standard & Poor’s). In the unlikely event of any issuing institution being unable to meet their
financial obligations, you may not receive the full return of your capital and you could lose all, or part of your

investment, irrespective of the level of the Index.

and

Are there any compensation scheme arrangements?
Should Premier Fund Managers Limited become insolvent, compensation may be available from the Financial
Services Compensation Scheme, 7th Floor, Lloyds Chambers, Portsoken Street, London E1 8BN. Telephone:
0207 892 7300. A statement describing your rights to compensation is available from Premier Fund Managers

Limited on request.

dunstonh

keepitreal wrote: »

Given the current saving rates available, is this offer to good to be true? because the element of risk does not seem that great, when lookin back at the previous years FT100.
I wonder how the fund will achieve this level of performance.
New to investing hence the query!

It doesnt invest itself in the FTSE. none of them do. It uses investments elesewhere and various instruments to allow them to be able to suffer a 50% drop without impacting on capital.

This GEB is unusual from those you normally see on the board as it is an instituational GEB and not a retail GEB. Institutional products are typically used by pension funds, offshore bonds, SIPPs etc and not available to the general consumer. Terms do tend to be better for them. Retail GEBs are those offered by the banks etc which are usually poor value.

if you look at the risk being taken vs the reward potentially available it does look very attractive. I dont think anyone is expecting 16% being available on the FTSE over the next year (or 16% average p.a. over a few) so for anyone investing and wanting to put money for their UK content, then this product is ideal for that. Worst case scenario it becomes a passive tracker.

darren72

darren72 wrote: »

Every year I always put the maximum allowed into a Cash ISA, and would prefer to continue to do so. With this one requiring a minimum of £5,000 it would only leave £2,200 available to put in a Cash ISA.

Under these circumstances, can you see any disadvantages to investing outside an ISA ?

Thanks

Also, as £5,000 wouldn't increase by £9,000 is there ANY benefit at all in investing into an ISA ?

Thanks

digger3_2

Thanks for all the replies.Is it best to invest directly with premier or via co-funds.Thanks.Digger

dunstonh

Is it best to invest directly with premier or via co-funds

Do you want to eat an apple or an orange?

Cofunds is a fund supermarket offering a range of around 1000 funds. These are direct investment into those funds with no capital guarantees. Premier's product is a structured product with a defined tie in, rate of return and maturity process.

The premier product is probably useful for those wanting to have exposure to the UK stockmarket with some form of capital security. It could well be the case that the Premier product offers better potential than most UK growth funds (if not all).

Also, as £5,000 wouldn't increase by £9,000 is there ANY benefit at all in investing into an ISA ?

This is answered higher up.

meester

darren72 wrote: »

Every year I always put the maximum allowed into a Cash ISA, and would prefer to continue to do so. With this one requiring a minimum of £5,000 it would only leave £2,200 available to put in a Cash ISA.

Under these circumstances, can you see any disadvantages to investing outside an ISA ?

Thanks

Do you use your share ISA allowance?

If not, then I would say giving up £1,400 of the cash ISA allowance is not worth it.

If you do use your share ISA allowance but don't have £7k to spare after putting £5k in this, I would say it is better to put the full £7k in this inside an ISA and zero into the cash ISA, purely so that you don't lose the allowance..

meester

digger3 wrote: »

Thanks for all the replies.Is it best to invest directly with premier or via co-funds.Thanks.Digger

Will co-funds sell this product to you?

darren72

meester wrote: »

Do you use your share ISA allowance?

If not, then I would say giving up £1,400 of the cash ISA allowance is not worth it.

Normally, I only use the Cash allowance.

Thanks