Investec Balanced Growth Account

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lotus

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Balanced Growth Account - Issue 1

100% Capital Protection at Maturity
The Balanced Growth Account offers 100% capital protection at maturity provided by Investec Bank plc (Irish Branch) giving you the potential for stock market related returns without any downside risk over the three year nine month investment term.
Follows Major Stock Market Indices

The interest payable on the Balanced Growth Account is dependant on the performance of two world renowned stock market indices, the S&P 500 Index relating to stocks from the United States and the Dow Jones Euro Stoxx 50 Index relating to stocks from the Euro zone.

100% participation with up to 40% growth (Gross AER 9.39%)

The Balanced Growth Account gives investors the opportunity to take advantage of a stock market recovery in the U.S. and Euro zone markets participating fully in the growth of an equally weighted basket of the two indices up to a maximum return of 40% (AER 9.39%).

I received information on the above account today from Investec bank.
It seems like a good deal - 100% capital security while also allowing potential for up to nearly 10% a year growth.
Any opinions?
Any banks offering similar?
 
Any feedback on this ? I got the same letter out from Investec and wondered how secure the investment will be..

4 years (3yr 9 months) with a maximum return of 9.39% AER.
 
I got this also. It all depends what you are after:
- "100% capital security"... you get this in any of the banks / post office on deposit accounts.
- "Potential for up to nearly 10% a year growth"... The two considerations here are "potential" and "up to". You can open an account with a bank and get a fixed rate. Secondly you can invest in various funds and get complete upside (rather than capped here). So depends what you want. It appears a middle ground, but might be better off investing in an index - if you think things are giong up.
 
Remember that 9.39% AER is before DIRT. It's max. 6.98% after DIRT.

The brochure is available [broken link removed], but as far as I can see it doesn't give any info about fees (including intermediary fees) other than to warn that:
Deductions for charges and expenses are not made uniformly throughout the life of the product but are loaded disproportionately onto the early period.
Click to expand...
I suppose if you share their optimism about the likely performance of the S&P 500 and the EURO STOXX 50 for the next three to four years, it would make more sense to invest directly in an index tracker. But I'm not aware of any comparable current offerings with full capital protection.
 
Bump. This closes on Friday week. Have any former depositors decided to take a punt on it? Or has anyone heard of equivalent offerings elsewhere?
 
Got the brochure from my agent who said he would contact to discuss the almost maturity of 6 month deposit with Investec. I have to establish what fees if any are applicable etc. Was seriously thinking of rolling it over into this offer.

Has anyone else a better proposal considering I want a low risk investment. Interest rates are also on the upward trend but I need to act sooner rather than later.
 
lazing said:
- "100% capital security"... you get this in any of the banks / post office on deposit accounts.
Click to expand...
This isn't entirely true.
This Investec account gives "100% capital security" for the duration of the account.

If you are investing over 100k in "any of the banks" you have "capital security" until the end of September 2010 only.

Investec have another of these on offer, 'til 20th November. Not sure whether to go in or not.
 
Are you sure about your intrepretation of "capital security"? Could it just be that Investec are drawing your attention to the unusual security feature of this stock market investment product i.e. your initial deposit is secure.

If this is the case, then your deposit would continue to be guaranteed under the conditions of the UK Financial Services Compenstion Scheme - see www.fscs.org.uk

Has anyone got any comments on this product as if the worst I can do is get back my initial deposit it might be worth a punt at the minimum deposit amount of €20,000.
 

Of the 10 things to avoid in investing, I rank structured products from banks aimed at the private investor right up there. Yes, it provides a guarantee but the chances of decent returns are small, in my view, given the very high costs. If equity markets have delivered 9-10% annual returns in the past 100 years (clearly not in the past decade) then that is a reasonable return assumption on a 3-5 year view. Guaranteed products need to buy the insurance to provide the guanantee and that will eat into the return each year. Distribution costs are normally around 3% up front, further eating into the return and annual management costs will weigh heavily also. You could be lucky, markets could go on a rip in which case there will be enough returns to share all-round. But the retail investor is last in line behind the insurer (fair enough), the product provider and the distributor.

Rory Gillen
 
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