Bristol & West is aiming to provide investors with a mixture of income and growth with it's latest combination product, issue 16 of the balanced guaranteed equity bond.
The bond has a six-year term and investors are guaranteed the return of their original capital whatever happens to the indices. It combines a high interest account with a guaranteed equity bond that is linked to three stockmarket indices. Investors who invest the minimum balance must put all their capital in the guaranteed equity bond element. Those who have more than the minimum investment cannot put more than half their investment in the high interest account element.
The high interest account has an interest rate of 6.5 per cent that is fixed for 12 months and no withdrawals can be made during the term. The guaranteed equity bond element provides investors with 70 per cent of the average growth in the FTSE 100, Eurostoxx 50 and Nikkei 225 indices.
When calculating the final returns on the guaranteed equity bond element, the closing level of each index is recorded on August 14, 2002 and an average is produced. This is compared to an average of all three indices between August 14, 2007 and August 14, 2008.
Like other combination products from Northern Rock and Royal Bank of Scotland, investors are restricted in terms of the way they can split their investments between the elements. However, Bristol & West does allow investors more flexibility than both competitors as they specify an equal split between the two elements on their products.