View more on these topics

CSFB bonds with Titans

Credit Suisse First Boston has established the global titans income or protected growth plan 2, a guaranteed equity bond that is linked to the Dow Jones global titans index for five years.

The bond tracks the index by investing in Andrea IV Investments, a Jersey-based company and offers investors three options. The protected growth option offers up to 55 per cent growth and the return of the original capital at the end of the term.

Alternatively, investors can go for an annual income of 10 per cent a year or quarterly income of 2.25 per cent. Investors opting for income will also get their original capital back, less income payments, whatever happens to the underlying investment.

To calculate the final returns, the 50 stocks that are listed on the Dow Jones global titans index are grouped into five baskets, each containing 10 stocks. For example, Sony and GlaxoSmithKline are in one basket, while Ford Motor Company and Microsoft are in another. Each basket represents 11 per cent of the final return for the growth option, 10 per cent for the annual income option and 9 per cent for the quarterly income option. Where a stock in any basket falls by more than 33 per cent of its initial value during the final year of the term, the value of the other stocks in that basket are wiped out.

The main benefit of the bond is that investors&#39 capital is safe whatever happens. However, it only takes a one stock to fall by more than 33 per cent to wipe out the value of the others. This would reduce the returns even if the other nine stocks in the basket perform exceptionally well.

The Dow Jones global titans index rose from 177.05 points on February 18, 1997 to 227.08 points on February 18, 2002.

Recommended

Opra says it is being overrun by bad SSASs

Opra says regulating small self-administered schemes is a waste of its time and that its resources are being exhausted by an overwhelming number of small badly run pension schemes.It says questions should be asked as to why it must spend valuable resources on regulating small SSASs.Opra says because Ssas members run the schemes themselves, it […]

ScotMut decision trees to help IFAs plot their future

Scottish Mutual has drawn up a set of decision trees to help guide confused IFAs through the options available to their business following the FSA&#39s polarisation proposals in CP121.The decision trees go through what it would mean to be an IFA under the regulator&#39s proposals to help them discover if their business are sustainable under […]

Portfolio debut by ABN Amro

ABN Amro Asset Management is entering the discretionary managed portfolio market with its Premier Funds Service investing in an range of multi-manager portfolios.The service will be managed by Aidan Kearney, who joins ABN Amro this week from Singer & Friedlander along with a team of five colleagues.The service, to be marketed through intermediaries, offers a […]

Survey reveals only 10% know the Isa limit

Consumers are still in the dark about Isas, with only one in 10 knowing the annual limit for a maxi Isa, according to research carried out by stockbroker comdirect.More than half of the sample of 1,000 thought they knew the answer but were wrong.Even among holders of a maxi Isa, one-third do not know the […]

1

School fees planning

Jeremy Pearson is Technical Support Manager with Canada Life’s ican Technical Services Team. Canada Life offers a range of wealth management solutions, including retirement income planning, estate planning and investment solutions from a choice of jurisdictions, including the UK, Isle of Man and Republic of Ireland. Many parents value the standard of education offered by […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment