Bank of Scotland International (BoSI) has launched a guaranteed bond linked to the stock markets of ...
Bank of Scotland International (BoSI) has launched a guaranteed bond linked to the stock markets of the Far East, Europe and the UK.
The bond offers clients 10% fixed interest return after 12 months on half the investment.
There will be a sterling and a dollar version of the product, with minimum investments of £10,000 and $20,000 respectively.
The start date of the bond is 27 April 2006, with an application closing date of 21 April.
Michael Chaytor, head of retail sales and service at BoSI, said the product invests 50% of capital for one year at a 10% fixed rate with the remainder invested over five years. The five-year investment would then track the FTSE 100 Index, Swiss Market index, Dow Jones Euro Stoxx 50 and the Nikkei 225.
Chaytor said investors would also receive 65% of the average rate of increase for the four indices over the five-year period.
He added: "We have set an investor bonus to encourage earlier participation. If we receive an application for the dollar version by 6 April, the initial holding account will match the US Federal Reserve rate. If received after 6 April, this return will be 0.2% below base rate."
For the sterling product, if a customer invests by 6 April, the initial holding account will match the Bank of England base rate, with the rate of return lowering to 0.2% after this date.
The products are tranche 16 and differ slightly to the previous issues launched (International Investment, December 2005, p15). Issue 15 offered investors a fixed 8% rate return in year one, with a 75% participation rate of the indices growth over five years.
Chaytor said the products were designed to bridge the gap between deposit accounts and equity investments.
He said: "Capital protected products first became popular with our customers after the bursting of the technology bubble in 2000. Part of the reason why there has been increased interest recently is because of the greater potential upside returns on offer from these products."
US dollar and sterling capital guarantee bond
10% return for the first year
Linked to the performance of the FTSE 100 Index, Swiss Market index, Dow Jones Euro STOXX 50 and the Nikkei 225
Regtech or fintech
Underperformance still present – for now
15% increase in number of claims paid
Open architecture philosophy
Inflation above 2% for first this this year