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Britannia International takes optimum route to growth

Britannia International’s optimum growth bond 9 is a six-year guaranteed equity bond which could mature in year three.

The bond is linked to the performance of the FTSE 100 index and will provide a full capital return regardless of the performance of the index. Investors will also get 33 per cent of their original investment at the end of year three if the index has risen by 33 per cent at that point. Otherwise, the product will run full term, providing 145 per cent of the growth in the index.

To calculate the returns, the closing level of the FTSE 100 index is taken on the first day of the term and compared with its closing value on the third anniversary. If the index has not risen by at least 33 per cent, the initial starting level will compared with the daily average produced over the final year of the full six-year term.

Although the bond is designed to be held for up to six years, emergency withdrawals of at least £5,000 can be made at any time except within the first and last month of the term. Withdrawals are subject to a fee which depends on the year in which the withdrawal is made.
For year one, the fee is 10 per cent of the amount withdrawn and this scale decreases by one per cent a year until year five. The fee is taken from the remaining capital on the day the withdrawal is made.

Bank of Ireland Isle of Man has a similar six-year product with an early maturity feature, but this feature has more trigger points than the Britannia International product so stands a greater chance of maturing early. It provides 120 per cent of the rise in the index if it runs full term, which is lower than the Britannia International product.

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