Article Abstract:
Corporate bond personal equity plans (Peps) are available for United Kingdom investors thinking of moving away from equities. These Peps may offer high yields but they may also involve a risk to capital. Cash is the safest vehicle for investors seeking security and Pep investors can focus on safer bonds which are scheduled for maturity within two years. German interest rates may be raised in Aug 1997 and this could affect bond prices. A drop in earnings with stable inflation may make bonds attractive in relation to equities, otherwise cash may be a better bet.
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Article Abstract:
Scottish Amicable is offering a personal equity plan (Pep) which gives a guaranteed yield and a guaranteed return on money invested. Non taxpayers can obtain better rates from building society bonds while taxpayers can invest in guaranteed income bonds without using their allowance for Peps. There are also risks involved such as a possible reduction in the real value of invested capital, so higher rate taxpayers may not benefit. It may be better for investors to accept risk and thus gain better long-term rewards.
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Article Abstract:
UK unit trusts and personal equity plans (Peps) are being advertised as having cut their charges, but investors should look behind advertisements for cuts in unit trust charges. Investment decisions should not be based purely on charges, but on performance as a whole. Prolific is marketing its High Income Pep as the leader in the sector for UK income trusts. This is misleading since the Pep has a good performance but is not the leader for the markets as a whole.
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