Britannia International has established the ninth edition of its guaranteed capital equity bond.
This issue of the bond offers growth potential of 38.25 per cent over five years. Like the previous issue, the bond returns investors' original capital whatever happens to the FTSE 100 index during the term. Investments will accrue a fixed rate of interest at 6 per cent gross until the start of the term.
To calculate the final returns, the closing level of the index is taken at the start of the term and is measured against the average level of the index during the last 12 months of the term. If the index has risen or has remained at the same level, investors get their original capital plus 38.25 per cent gross. If the index has fallen, investors will only get their capital back.
The choice of the FTSE 100 index may be a comfort factor for UK investors, who are likely to be more familiar with it that other indices such as the Dow Jones Global Titans index.
The Dow Jones Global Titans Index is the chosen index for Irish Life International's secured growth bond.
The Irish Life International bond offers higher growth potential of between 60 and 75 per cent of growth in the index. But more cautious investors may prefer the Britannia product because it has a fixed return of 38.25 per cent gross as long as the FTSE 100 rises, whereas returns on the Irish Life product depends on how much its index rises.