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  • FIRST POST
    • HappyUser
    • By HappyUser 20th Oct 19, 5:38 PM
    • 274Posts
    • 14Thanks
    HappyUser
    Capital guaranteed investments
    • #1
    • 20th Oct 19, 5:38 PM
    Capital guaranteed investments 20th Oct 19 at 5:38 PM
    Hello

    Where can I find a comparison of available capital guaranteed investments?

    Also there is a £50k guarantee from FSCS, is this if your investment underperforms or if the firm goes bust?

    Thanks
Page 1
    • AnotherJoe
    • By AnotherJoe 20th Oct 19, 6:21 PM
    • 16,231 Posts
    • 19,458 Thanks
    AnotherJoe
    • #2
    • 20th Oct 19, 6:21 PM
    • #2
    • 20th Oct 19, 6:21 PM
    FSCS never give guarantees on performance.
    • SonOf
    • By SonOf 20th Oct 19, 6:28 PM
    • 1,761 Posts
    • 2,023 Thanks
    SonOf
    • #3
    • 20th Oct 19, 6:28 PM
    • #3
    • 20th Oct 19, 6:28 PM
    Where can I find a comparison of available capital guaranteed investments?
    There are virtually no capital guaranteed investments available at this time.
    There are some capital secure investments but most are not great.

    I am being specific with my words there

    Also there is a £50k guarantee from FSCS, is this if your investment underperforms or if the firm goes bust?
    There is no £50k FSCS limit on investments. It is £85k and there is no compensation for so called underperformance. The performance will be what it will be and cannot overperform or underperform.
    • eskbanker
    • By eskbanker 20th Oct 19, 6:54 PM
    • 11,642 Posts
    • 14,412 Thanks
    eskbanker
    • #4
    • 20th Oct 19, 6:54 PM
    • #4
    • 20th Oct 19, 6:54 PM
    Where can I find a comparison of available capital guaranteed investments?
    Originally posted by HappyUser
    https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/
    • HappyUser
    • By HappyUser 20th Oct 19, 10:24 PM
    • 274 Posts
    • 14 Thanks
    HappyUser
    • #5
    • 20th Oct 19, 10:24 PM
    • #5
    • 20th Oct 19, 10:24 PM
    I don't think you give me good advice.

    I read that there are capital guaranteed equity funds?
    • SonOf
    • By SonOf 20th Oct 19, 10:31 PM
    • 1,761 Posts
    • 2,023 Thanks
    SonOf
    • #6
    • 20th Oct 19, 10:31 PM
    • #6
    • 20th Oct 19, 10:31 PM
    I don't think you give me good advice.

    I read that there are capital guaranteed equity funds?
    Originally posted by HappyUser
    The word "guaranteed" is a protected word with regulated investments. It has to actually mean guaranteed. This is why most firms will use the term "secured" or "protected" as there are scenarios where they are not "guaranteed" and losses are possible.

    There are plenty of unregulated scams that use the word guaranteed.

    Maybe it would help if you actually gave us the name of this "fund" you are talking about.
    • HappyUser
    • By HappyUser 20th Oct 19, 11:47 PM
    • 274 Posts
    • 14 Thanks
    HappyUser
    • #7
    • 20th Oct 19, 11:47 PM
    • #7
    • 20th Oct 19, 11:47 PM
    https://www.santander.co.uk/csgs/StaticBS?blobcol=urldata&blobheadername1=content-type&blobheadername2=Content-Disposition&blobheadervalue1=application%2Fpdf&blo bheadervalue2=inline%3Bfilename%3DLIFE0711APR10T.p df&blobkey=id&blobtable=MungoBlobs&blobwhere=13140 10550805&maxage=3600

    https://www.moneysupermarket.com/savings/guaranteed-equity-bonds/

    https://www.lv.com/investments/flexible-guarantee-bond
    • SonOf
    • By SonOf 21st Oct 19, 12:20 AM
    • 1,761 Posts
    • 2,023 Thanks
    SonOf
    • #8
    • 21st Oct 19, 12:20 AM
    • #8
    • 21st Oct 19, 12:20 AM
    You seem to be mixing up savings accounts with investments or deposit based structured products. The LV option requires you to pay for additional security on top of the normal charges which hits the returns and makes the product potentially pointless.

    Santander link is broken but their current investment products do not appear to include any guaranteed option.
    • Marcon
    • By Marcon 21st Oct 19, 11:06 AM
    • 1,338 Posts
    • 1,056 Thanks
    Marcon
    • #9
    • 21st Oct 19, 11:06 AM
    • #9
    • 21st Oct 19, 11:06 AM
    Try googling.
    • Reaper
    • By Reaper 21st Oct 19, 1:21 PM
    • 6,711 Posts
    • 5,068 Thanks
    Reaper
    You want to be able to invest in the stock market but not risk your capital.

    However you have to realise that's something of a contradiction so anything that provides that comes at a cost you might not want to pay.

    I think the closest to what you are after is a Guaranteed Equity Bond, but honestly they are complex, offer poor returns, and are still not risk free. I haven't seen many around recently either, though I haven't been looking. As this site suggests you are better off making your own.
    https://monevator.com/guaranteed-equity-bond/
    • Wildsound
    • By Wildsound 21st Oct 19, 1:52 PM
    • 326 Posts
    • 269 Thanks
    Wildsound
    Assuming my understanding is correct, you're looking to invest XX amount and want to know that in Y years time, you will have a minimum of XX amount?

    Of course, the risk is that if you receive back the minimum of XX, inflation would have likely eroded the real value of this down, but the nominal value is still the same.

    In theory, you could do it yourself with an approach as follows:

    Lets say you want to invest £100,000 with a guarantee that in 5 years time, you will get a minimum of £100,000 back (in nominal terms - i.e. not taking into account inflation)

    Looking at the best 5 year fixed rates (cash deposits) and you use United Bank UK 2.36% AER. Then you would deposit £88,991.52 into the account as in 5 years time, the account will mature at a value of £100,000.

    The remaining £11,008.48, you would then invest (e.g. into a globally diverse fund). At the end of the 5 years, you would then have:

    £100,000
    +£11,008.48 (+/- any growth/losses)

    If your investment's annualised returns are less than the cash deposit fund, then you have protected yourself from that downside had you been fully invested. If your investment's annualised return is more than the cash deposit fund, then you have missed out on the upside had you been fully invested.
    • Wildsound
    • By Wildsound 21st Oct 19, 1:55 PM
    • 326 Posts
    • 269 Thanks
    Wildsound
    Reaper sneaked in before me with a link to exactly what I have just described!
    • Malthusian
    • By Malthusian 21st Oct 19, 2:00 PM
    • 6,955 Posts
    • 11,225 Thanks
    Malthusian
    Both structured deposits and investment bonds with guarantees are extremely complex products and regulated independent advice should be taken.

    If you want a higher return than a savings account gives but don't want to take more risk, put more money in the savings account. (Subject to the £85k limit.)
    • Davy Jones II
    • By Davy Jones II 21st Oct 19, 2:49 PM
    • 411 Posts
    • 752 Thanks
    Davy Jones II
    These used to be a relatively common product before the crash. In effect something like 80% of your investment was put on deposit for five years (so it’d grow to 100% by maturity), 17% was used to buy a call on the stocks or the index, and 3% was the seller’s margin.

    This pays you all of the increase in the stocks, and also guarantees* your money back. It sounds like something for nothing, but isn’t, as you gain no interest and receive no dividends.

    *The guarantee depends on the bank not going bust; you are facing their credit.
    • Malthusian
    • By Malthusian 21st Oct 19, 3:03 PM
    • 6,955 Posts
    • 11,225 Thanks
    Malthusian
    These used to be a relatively common product before the crash.
    Originally posted by Davy Jones II
    And for a few years after it. Then the terms became total rubbish.

    *The guarantee depends on the bank not going bust; you are facing their credit.
    Although in the product you're describing you would be covered by the FSCS.

    If the five-year deposit is replaced with a five-year loan note to the bank, you get better terms in exchange for the risk of 100% loss if the bank goes bust.
    • Marcon
    • By Marcon 21st Oct 19, 5:48 PM
    • 1,338 Posts
    • 1,056 Thanks
    Marcon
    Why not put your cash under your mattress?
    • Thrugelmir
    • By Thrugelmir 21st Oct 19, 5:52 PM
    • 65,334 Posts
    • 57,507 Thanks
    Thrugelmir
    Dead link..........


    Sorry, we don't have any guaranteed equity bonds available at the moment. Why not check out some of our other deals below.
    ““there really is no such thing as ‘the future’, singular. There are only multiple, unforeseeable futures, which will never lose their capacity to take us by surprise.””
    ― Niall Ferguson
    • Robin9
    • By Robin9 24th Oct 19, 4:06 PM
    • 5,060 Posts
    • 3,307 Thanks
    Robin9
    Did they not teach you about these at the LSE ?
    Never pay on an estimated bill
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