Three more guaranteed bonds

Scottish Mutual, HSBC Asset Management and Albany Life are to launch guaranteed products in October, writes Jane Wallace

Albany Life International, through Canada Life, will launch another version of its offshore bond paying 10.5%pa before tax over three years on 1 November. High Income Bond II also offers a growth option of 33% on maturity

The income and growth options on the product are guaranteed but the return of original capital is linked to the performance of the Eurostoxx 50 Index. If the index has risen from its starting point at the commencement of the bond by maturity, investors will receive back all the growth and income returns and the original capital

If the index should fall from its starting level by less than 10%, a form of precipice structure takes effect

The structure is effectively based on a three to one ratio. For every 1% the index falls the original bond capital falls by 3

After a 10% loss in the index, the erosion of original capital reverts to the normal one-for-one loss associated with these kinds of reverse convertible products

Scottish Mutual will also launch a second version of its Income Bond on 12 October. This bond offers exactly the same structure and returns of the original bond which closed on Friday. The headline annual income is 8% over three years, with a monthly income option of 0.65% and a growth option of 25

So long as the index does not fall below 20% from its starting point at the at any time during the bond's life, investors will receive back all the growth and income returns and the original capital

HSBC Asset Management will put out a fixed income Dublin Isa next month. It is likely to be similar to its last Isa product, which offered a guaranteed 7.25% over five years linked to the FTSE 100

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