Britannia International has launched a 5.5-year guaranteed bond that offers investors geared access ...
Britannia International has launched a 5.5-year guaranteed bond that offers investors geared access to the FTSE100, but with an unusual early redemption clause.
This clause states that if the FTSE makes 31% or more in the first 3.5 years, then the bond will mature early, leaving the investor with gains capped at 31%.
The Optimum Growth Bond is Issue 3 of the product and follows on from the sell-out success of Issue 2. It is pretty much identical to previous issues of this product but with the addition of the early maturity clause.
The return for investors is calculated by comparing the value of the FTSE 100 index at the close of business on the day the bond starts with its value after 3.5 years. If the end value shows the FTSE 100 index has grown by 31% or more, the bond will mature and interest returned. In this case a 31% gross / 8% AER return is paid at the end of the 3.5 years.
If the FTSE 100 index has not grown by 31% or more at this time the bond will continue to run for its 5.5 year term. Growth in the FTSE 100 index will then be measured by comparing the start value with its value after 5.5 years.
The original capital is guaranteed to be repaid in any event. Commission is set at 3%.
Wayne Riches, client relationship manager at Britannia International said: "We are delighted to be able to re-issue the Optimum Growth Bond with the same very attractive terms and conditions.
"Interest from intermediaries in this product has been growing all the time and we foresee keen demand for this third issue."
Minimum investment is £10,000. However, existing customers may open an account with £5,000.
Applications must be received by 18 May 2004 at the latest (subject to availability) and early investments will be paid interest of 4.50% gross pa from the date of deposit up to the Bond"s start date of 1 June 2004.
There are no administration or management charges.
Square Mile’s series of informal interviews
'An entirely different beast': How have emerging markets, Asia and Japanese equities evolved over the past decade?
Talking Strategies: In the video below, Jupiter's fund managers discuss how changing tides over the past two decades have resulted in emerging markets, including EMD, and Asia and Japanese equities to become a core part of many wealth manager portfolios....
Spent 20 years with Aviva
Latest news and analysis