Bristol & West has established a Tessa-only Isa (Toisa) that is linked to four stockmarket indices for a seven-year term.
The global BGEB Toisa 7 year issue aims to provide capital growth by investing in the FTSE 100, Nikkei 225, S&P 500 and the Swiss Market Index (SMI) index. The SMI index was created on June 30, 1988, with a base value of 1,500.00 points. It stood at 5,054.20 points on August 7, 2002.
Investors get their original capital back whatever happens to the indices and they also get 90 per cent of the average growth.
The returns are calculated by comparing a starting level based on the average monthly closing levels of the indices in the first year with the average monthly closing levels during the final year.
Investors also have the opportunity to use Bristol & Wests guarantee the gain facility, which enables investors to lock in gains where the indices rise by 50 per cent during the term.
This Toisa may be attractive to long-term investors who want higher returns than available with a Tessa-only cash Isa, but who do not want to risk their Tessa nest eggs by reinvesting directly in the stockmarket.
This Toisa uses the tried and tested guaranteed equity bond template and its inclusion of the SMI index ensures greater geographical diversity than one index. The guarantee the gain option is also interesting and this may appeal to more cautious investors. However, if chosen, the drawback for investors is that the level of growth is fixed at 50 per cent throughout the term and any further growth will not be passed on.