Anglo Irish Bank has established the Capital Protected Bond V, a product which splits investors capital equally between a guaranteed equity bond and offshore high-interest account.
The high interest account is used to provide income of 7.25 per cent gross a year during the six-year term of the product. The other half is used to provide growth by investing in a guaranteed equity bond linked to a basket of indices - the FTSE 100, S&P 500, Dow Jones Eurostoxx 50 and Nikkei 225 indices.
Investors will get 70 per cent of the growth in the indices plus a full capital return regardless of how the indices perform. When calculating the returns averaging will be used for the last 12 months of the term.
Anglo Irish Bank's product is currently the only offshore structured product that provides income and growth, so this makes it unique. If investors are considering making an investment in a separate high-interest account and guaranteed equity bond it would be difficult to find offshore products which have a six-year term.
For example Bank of Scotland International offers fixed rates for up to five years, not six. Also, most of the current crop of offshore structured products are linked entirely to the FTSE 100 index. The main exception is Manor Park's global growth September 04 which is linked to the FTSE 100, S&P 500 and Dow Jones Eurostoxx 50 index but again this has a five-year term so is not comparable with the guaranteed equity bond element of the Anglos Irish Bank product.
However the Anglo Irish is not perfect as investors lose out on 30 per cent of the growth in the indices to pay for the capital protection which may not be necessary if the global market continues to recovery.