Spotlight: Dresdner RCM's Investment Trust PEPs

The Products: Dresdner RCM's Investment Trust PEPs.

The Deal: Dresdner RCM Global Investors is slashing its initial charge from 3.5 per cent to zero. As with all personal equity plans (PEPs), up to pounds 6,000 can be invested. Up to pounds 1,500 can go into assets invested outside the UK. Investors who put money in before 5 April, the start of the new financial year, can harness the tax-sheltered PEP twice over: up to pounds 6,000 more can be invested between April this year and next.

Plus points: The decision to slash the initial charge gives investors a rare opportunity to tap into some useful investment expertise without fussing too much about cost. Some of the investment trusts run by the company have seen dazzling performances: the Kleinwort Charter Investment Trust turned pounds 6,000 into pounds 15,542 between in just five year, between 31 December 1992 and 31 December 1997. The range of funds is impressive: investors who believe the UK stock market is peaking can instead put the money into equities and bonds across Europe.

Other charges are also low. This investment expertise will cost just 1 per cent a year (plus VAT) - compared with 50 per cent more for some rivals.

Drawbacks and risks: Until 17 March, it is not quite clear - with any PEP - what the rules on tax relief for PEPs will be. The likelihood is that growth will still fetch 10 per cent tax relief for the next 10 years. Then it may go to zero. Investment trusts perform best as a long-term investment - so don't count on the tax reliefs.

Verdict: An inexpensive and valuable opportunity - if the right fund is picked.

Marks out of five: Four