Bristol & West has added to its range of products with the introduction of the six-year guaranteed equity bond (GEB) Isa.
This is a guaranteed Isa that can be taken out as one of two versions, either as a mini-cash or a Tessa only Isa. It is aimed at cautious investors looking for a product that offers growth with capital protection.
At the start of the investment period, Bristol & West will invest the majority of the investors capital into zero coupon bonds. These are bonds that that do not have coupons which fix their interest rate. Instead they are issued at a discount to their redemption value, so that investors are able to get a gain on their investment when the bonds are redeemed at the end of the period.
Over its six-year period the GEB Isa will invest in three separate indices, the FTSE-100, Eurostoxx 50 and Nikkei 225.
Investors will be able to get up to 80 per cent of any growth in the three indices. Each index will be measured at the start of the period, while the final index levels will be measured by taking the average level over the last year. The growth in each index is added together and then divided by three to form the final level of return. Whatever happens to the indices, the investor will get their original capital back.
Over the past few weeks and especially following the destruction of the World Trade Centre on September 11, 2001, world markets have been highly volatile and have seen large falls. Investors worried about the state of the markets should find this product attractive thanks to the capital guarantee.
From September 17 1995 to September 17, 2001 the FTSE 100 index went from 3,972.26 points to 4,898.9 points, the Nikkei 225 went from 22,112.24 points to 9,679.88 points and the Eurostoxx 50 index went from 1,442.24 points to 3,098 points.