The market maker said that the low inflationary environment means that the real rate of return on 25 year with profit endowments rose from an average of 3.0 per cent to 5.7 per cent between 1991 and 2001(gross returns minus inflation), according to the Money Management With Profits Endowments survey.
Tracey Merrit, investment manager, Beale Dobie, said: "Investment demand for TEPs is particularly strong at the moment. Investors perceive TEPs to be a safe haven and in times of market volatility or, as we have seen recently, significant falls, demand for TEPs increases. The other reason investors like them is that current rates of returns on maturing TEPs have recently been approaching 10 per cent, which is a great return for a short to medium term investment."
