HSBC International has launched a guaranteed capital investment bond which offers a choice of income ...
The fixed income options pay an annual income of 7% in sterling or dollars. There is a guaranteed return of capital if the index rises, stays the same or falls by no more than 10% over the three year investment period.
The Sterling Income option is linked to the FTSE 100 and the dollar option is linked to the Dow Jones Euro Stoxx 50 Index.
The growth options provide 100% capital security plus the potential of stock market returns. Growth options have a four-year investment period.
European Growth offers a return on the initial investment multiplied by 70% of any growth in the Stoxx 50 index over the four-year investment period, subject to a maximum investment gain of 64% - a flat rate equivalent of up to 16% per annum. Also included is a Japanese Growth option that provides return of the original capital multiplied by 80% of any growth in the Nikkei 225 Index over the investment period, with no restriction on the maximum return.
Paul Leech, chief executive of HSBC Bank International, said: "Previous classes of the bond took £120m. This new tranche repeats the same format but with enhanced terms across the board - there are increased possible returns on the European Growth class and we have also removed the cap on the Japanese growth options.
"For the more cautious investor, the growth options are an attractive alternative, particularly given the contrasting market fortunes Europe and Japan have offered in recent years.
"We also believe that the income option's regular six-monthly payments should provide security for investors who are looking for income."
Capital is returned at the end of the investment period provided that at maturity the relevant index has not fallen by more than 10%.
The bond is open for investment until 14 January 2000 unless it becomes oversubscribed. The minimum investment is $5,000 or £5,000.
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