Product of The Week

With interest rates so incredibly low and markets starting to show the first signs of settling down a cautious confidence has started returning to investor’s thoughts.

Over the past months we have received numerous requests from investors seeking an investment offering high returns with low risk and a short investment term. So far it has proven very difficult to find such a product but through perseverance I am pleased to say we believe we have tracked down a very credible solution worthy of consideration.

What is the AVIVA Defined Returns Fund?

It offers growth dependent on the performance of the FTSE 100TM Index* and is a way of gaining potential growth without investing directly in the stockmarket.

The Aviva Investors Defined Returns Fund 1 has a maximum 3 year term with the potential to mature early on its first or second anniversaries, subject to certain conditions.

The return is dependent on the FTSE 100TM Index being equal to or higher than it was on 7 August 2009 at either one of the anniversaries, or at maturity.

• If at the first anniversary the FTSE 100TM Index is higher than it was on 7 August 2009, the Fund aims to return your initial investment plus 8% and the Fund will mature early.
  


• If the Fund hasn’t matured at the second anniversary and the FTSE 100TM Index is higher than it was on 7 August 2009, the Fund aims to return your initial investment plus 16% and the Fund will mature early.
  


• If the Fund doesn’t mature early, at the end of the 3 year term, the Fund aims to return your original investment plus 24% if the FTSE 100TM Index is higher than it was on 7 August 2009. If the FTSE 100TM Index falls by up to 50% of its level at 7 August 2009, the Fund aims to return your initial investment only. If the FTSE 100TM Index falls by more than 50% of its level at 7 August 2009, you will lose more than 50% of your initial investment.
  
  

I believe this investment offers the potential for a greater return than cash whilst providing significant downside protection from further market volatility.

Timing of this style of investment is key. It is important to invest at a time when market prices are low, as they are at present. By doing so you limit the potential for any further downside and at the same time enhance the opportunity for upside returns.

This product may be suitable for you if you wish to:

1. Use your ISA allowance for the new tax year
2. Improve the potential for return on your existing cash ISA’s
3. Build some protection into your existing stocks and shares ISA
4. Improve the potential for return on your cash deposits.

5. Suitable for Trustee and Sipp monies.

I would ask you to give this investment your consideration and let me know if you would like any further information or to arrange a meeting to discuss this opportunity in more detail. I can be best reached on 01356 625285 or ifa@ferguson-oliver.co.uk

More Green Shoots.......

Upbeat manufacturing data has helped push UK equities higher again as commentators increasingly suggest the economy may be growing by the autumn and even the long-term bears are running out of reasons to be miserable.

Coming in at 45.4 in May, the seasonally adjusted CIPS/Markit Purchasing Managers’ Index remained below the no-change mark of 50.0 for the thirteenth successive month. But it also posted it third consecutively monthly rise - from an upwardly revised figure of 43.1 in April - and is now at its highest level for 12 months.

'At this rate we would hit the no-change 50.0 PMI benchmark by autumn – significantly earlier than economists initially predicted,' said Roy Ayliffe, director at the Chartered Institute of Purchasing & Supply. Production and new orders continued to decline in May, but at the slowest rates for twelve and fourteen months respectively and the orders-to-inventory ratio rose to a thirty-two month high - which is why Ayliffe and others are suggesting their could be economic growth within three months.

The news comes on the back of an upbeat report from the Engineering Employers Federation.
James Knightly, economist at ING, a long time bear on the UK economy, says even he might have to review his forecasts. 'Despite our worries concerning the impact of the bursting of the house price bubble and the implosion of the banks on a household sector that is the most indebted in the world, it appears that the slashing of interest rates and support from quantitative easing is generating a tangible improvement in the economy,' he says. He still sees a number of reasons to be cautious and thinks the leap in PMI may in part be down to re-stocking that could soon run out of steam. Nonetheless, he thinks today's data is another strong argument to start being less pessimistic about the UK.

Howard Archer, UK economist at IHG Global Insight agrees today's data is clearly good news and boosts hopes that the economy could start growing before the end of the year. Earlier, better than expected Chinese PMI data helped lift the mood on global markets. All eyes are now on the US ISM figures.

If - as expected - they come in with a positive number, an increasing number of market watchers might be arguing the recession is over in the US and that will boost hopes we'll be back in growth mode by the end of the summer.

Source: Citywire