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Chartwell issues early release bond

Chartwell Investment has teamed up with Keydata Investment to design a guaranteed equity bond that could mature earlier than its six-year term.

The bond is linked to the FTSE 100 index and could mature in years three, four, five or six, depending on the index performance. Investors will receive their original capital back regardless of the index performance.

To calculate the returns and determine when the bond matures, the closing level of the FTSE 100 index is measured on July 31, 2003. If the index has risen by at least 20 per cent from its start value on the third anniversary, investors will get a 20 per cent return. Otherwise, the bond will roll over to the following year. It will mature in year four if the index has risen by at least 30 per cent and investors will get a matching 30 per cent return.

Where this does not happen, the bond will roll over to year five and will mature at this point if the index has risen by at least 40 per cent. Investors will get a 40 per cent return in this case.

However, the bond could go full term and investors would get 100 per cent of the growth in the index. If this happens, the returns are based on the average level of the index during the last 12 months of the term.

HSBC&#39s capital & growth has fewer early release trigger points than the Chartwell product which means it has more chance of going full term, with higher returns. However, Chartwell wanted a product that had a reasonable chance of maturing early so it would appeal to investors who are used to high-interest accounts. This type of investor may be less willing to tie their capital up over the long-term.


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This guide from Johnson Fleming will take you through the required communication and also give ideas for additional actions that will ensure your auto-enrolment project is a success. The topics in this guide include: the letters you need to send out; what to send and when; the importance of employee engagement; and what to consider as additional communication.


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