Chartwell is looking at Europe with the introduction of the extra income bond.
This is a guaranteed equity bond aimed at investors who are looking for either income or growth and who are willing to invest in a medium-risk product.
The bond will be linked over a five-year term to the Dow Jones Eurostoxx 50 index, which is made up of the 50 largest companies in the eurozone. This includes companies like Nokia, TotalFinaElf, Deutsche Bank, Royal Dutch Petroleum, Siemens and Vivendi Universal. The index went from 1,749 points on November 14, 1996 to 3,730 points on November 14, 2001.
For income, investors can choose either an annual option of 7.25 per cent or a monthly income of 0.58 per cent. If they want growth they can choose to take 42 per cent of any rise in the index.
Investors will get their original capital back, but only if the index does not fall by more than 30 per cent over the five-year term. For every 1 per cent fall beyond this, the investors capital will be eroded by 1 per cent.
The Chartwell product is similar to the extra income and growth plan 8 from NDF Administration. This also invests in the Eurostoxx 50 index, but over a three-year period.
The two products may invest in the same area but they have different conditions attached. The NDF product sees the original capital fall if the index goes down by more than 20 per cent, compared to the 30 per cent limit on the Chartwell product. NDF also has a less attractive growth option of 33 per cent of any rise in the Eurostoxx 50. However, it has higher income options of 10.25 per cent a year or 0.78 per cent a month when compared to the Chartwell product.