Investments with the potential for 10% annual growth

Investments with the potential for 10% annual growth

24 August 2012 / by Oliver Roylance-Smith

Two opportunities for double digit returns...

"Any potential for double digits returns always demands some close attention and so we take a look at two investment plans offering the opportunity to provide 10% annual growth (not compounded). Both have the same investment term and both can mature early - so what’s the difference?

Legal & General’s Early Bonus Plan can mature early or ‘kick out’ from year 1 onwards, provided the FTSE at the end of each year is higher than its value at the start of the investment, even by just one point. Morgan Stanley’s Defensive Bonus Plan, on the other hand, can only kick out from year 2 onwards, however, the level of the FTSE can have fallen by up to 10% of its starting value.

Capital is at risk if the FTSE falls by more than 50% which is measured at the end of the term only rather than throughout the plan – this is the same for both investments.

So whether you think the FTSE will go down slightly, stay relatively flat or go up, each of these investments provides a compelling story and the potential for attractive returns."

Oliver Roylance-Smith, head of savings and investments
 
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This is a structured investment plan that is not capital protected and is not covered by the Financial Services Compensation Scheme (FSCS) for default alone. There is a risk of losing some or all of your initial investment due to the performance of the FTSE 100 Index.

There is a risk that the company backing the plan or any company associated with the plan may be unable to repay your initial investment and any returns stated. In addition, you may not get back the full amount of your initial investment if the plan is not held for the full term. The past performance of the FTSE 100 Index is not a guide to its future performance.

If you are at all unsure of the suitability of this type of investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.