What Could be NISA – A 5% plus return on your NISA

By March 6, 2015 No Comments

What Could be NISA – A 5%+ return on your NISA.

Further Important Information:

This NISA is a hyrbid. It is not a Cash NISA, but equally it is not a Stocks and Shares NISA as most people know them. However, it is a bit of a Ronseal. –“ It does what it says on the tin”. Refering back to the performance graph which illustrates the returns and the effect of smoothing over the last 5 years, we can see returns over 1 year is 7.5%, 3 years 24.6%, and 54% over 5 years.

It is backed by Prudenital, who are one of the largest insurance companies in the UK, and have run the Pru Fund range for over 10 years. It qualifies for investment protection under the long term insurance policy holder protection act so affords investors a 90% protection of unlimited value, rather than the FSCS scheme of £85,000 with Banks or £50,000 per fund with normal collective Investments.

The PruFund funds are designed to deliver smoothed growth by investing in many different investment areas. By investing in a range of assets the fund is less exposed to significant changes in the values of individual assets. Prudential’s investment specialists will constantly look for the best opportunities for growth within a wide range of investment areas. Prudential apply a unique smoothing process to these funds to provide a more stable return, than if you were directly exposed to daily changes in the funds’ performance.

PruFunds offer a unique smoothing process which is designed to help protect an investment from some of the daily ups and downs you might associate with a direct investment. The Prudential PruFund smoothing process has two elements:

1) Expected Growth Rates (EGR) applicable to each of the funds are normally applied on a daily basis. The EGR is the annualised rate that is normally used to increase the value of your unit price each day, and they are set quarterly by the Prudential Directors having regard to the expected long-term on the underlying assets of the funds.

2) Upwards and downwards pre-defined unit price adjustments, which will be applied when the fully transparent process requires Prudential to do so.

The fund carries quarterly investment dates are around the 25th of February, May, August and November when the, estimated growth rate is reviewed. The rates have been very stable over the last 6 years as per the quarters below:

November 2009 – November 2012 7.9% gross
November 2012 – February 2014 7.5% gross
February 2014 – November 2014 7.7% gross
November 2014 – present 7.3% gross

As can been seen this is a long period of stable expectations which have been met. There was only one change between November 2009 and February 2014. There has been two changes in the last 15 months and these were made with reference to bank on England views on Interest rates movements.

The slight increase of 0.2% in February 2014 was on the basis it was though interest rates were going to increase, but it became clearer we are in for a prolonged low base rate this increase was inverted with the subsequent reduction in November last year. That said, a volatility of 0.6% over 6 years is very modest indeed.

As money is only invested at quarter dates, moneys are held in a parallel cash account until the quarter date. So investors do not lose out, this fund pays exactly the same growth rate as the main fund and this amount is guaranteed. Based on the current EGR and standard charges this gives a guaranteed return of up to 1.4% up to the next quarter investment date in May.

Please note. Past performance in no guarantee of future performance. Investments in this funds can go down as well as up.

This is available now.

It could be the answer to many peoples prayers. An ISA which gives a decent rate of return, offered by big UK Insurance company, with strong Finanical protection. It’s fully flexible, with no fixed term and it can pay an income.

The expected growth rate after charges is set at 5.6% which is very attractive. It can accept contributions now and will be available to accept ISA transfers after 6th April.

This NISA is only available through FCA regulated Advisors and cannot be bought direct without advice. It is truly a one off in the market today, but you need to contact us to access it.

We already have a number of cllients who have invested in this fund through their pensions, and have benefited from the stable returns over the years, so it is not new to us.

Please either email, or give us a ring if you want to take advantage of this offer. Remember, this tax years NISA allowance ends 5thApril. NISA allowances are on a use it or lose it basis!