Newcastle Building Society has launched a guaranteed bond account investing in five funds, offering ...
Newcastle Building Society has launched a guaranteed bond account investing in five funds, offering investors participation in 75% of the underlying growth over five years.
The product, which opened to investment on 4 November, is being targeted at intermediaries. The offer period runs to 10 January.
Assets raised for the Guaranteed Five Star Bond II account will be split evenly between a mix of equity and bond funds, each with a five-star S&P Micropal rating.
The weightings to the underlying funds will not be rebalanced during the bond's life.
Over the five years to 30 September, 75% of returns from the five funds amounted to 34.4% on an offer-to-bid basis, compared to -1.57% from the combined absolute growth of the benchmarks the funds are measured against and a -8.47% return from the All-Share. Investors do not receive income from the funds but do get 75% of the total return at the bond's maturity.
The product is the second guaranteed bond Newcastle has launched, the first being an 80% guaranteed product marketed direct to Newcastle Building Society clients.
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