Scottish Life International has launched Series 3 of its six-year and two-month Protected Bonus bond, which guarantees a 16% return and is stock-market linked.
The maximum return is capped at 48% ' a possible 8% a year as long as the relevant stock markets rise in that year.
The annual bonuses are linked to the performance of the stock market indices of the FTSE 100, the Euro Stoxx 50 and the S&P 500. If any of the three markets fall over the year, then the investor does not receive a bonus. If all rise, then the investor gets the average performance, capped at 8%.
The Dow Jones Euro Stoxx 50 tracks the share prices, excluding dividends, of the 50 leading companies quoted on recognised stock markets in Europe. Companies listed include Philips Electronics, Unilever, Total and Nokia.
S&P 500 index tracks the share prices, excluding dividend of the 500 leading companies quoted in the US. Companies include Wal-Mart Stores, Coca-Cola and AOL Time Warner.
The FTSE 100 index tracks the share prices, excluding dividends, of the 100 leading companies quoted in the UK. Companies listed currently include BT, Barclays and GlaxoSmithKline.
The initial index level each year will be measured as the closing level of each index on 1 September from 2003 to 2008. The final level of each index each year will be determined by its lowest closing level over the final ten business days up to and including 1 September from 2004 to 2009. Each year, a bonus requires the final levels of all three indices to be at or above their respective initial levels. In the event of any one of the final index levels being less than the initial level, then no bonus will be payable for that year.
Once added this bonus is locked in and cannot be taken away, even if markets subsequently fall.
At the end of the Series 3 term, an investor can withdraw part of the final fund value although there may be a tax liability for doing so. Investors also have the opportunity to switch their investment into a new fund from Scottish Life International. There will be no tax charge or liability at that time for switching to a new fund.
The offer period for Series 3 begins on 9 June and must close no later than 25 July. Investors who invest before midday on 23 June receive an early investment bonus of 0.30% that is added to the initial investment.
An early investment bonus of 0.15% is allocated if the investment is received between midday on 23 June and midday on 7 July.
Minimum investment is £10,000. The minimum value return the investor is likely to get is £11,600 at the end of the term and a maximum value of £14,800.
The product is almost the same as its existing Protected Bonus bond and was launched following the success of Series 1 and Series 2. It will be available to UK and overseas investors.
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