Eurolife Fund Managers has introduced the investment plus plan, a guaranteed equity bond which is linked to the performance of three stockmarket indices over a term of five years and two months. It is also available as an Isa.
Investors can choose annual income of 10 per cent, monthly income of 0.8 per cent or two growth options. Capital growth opportunity offers 65 per cent growth. Like the income options, the original capital is returned unless any of the indices fall below 35 per cent. If they do, investors will still get their original capital back providing the indices are 95 per cent of the starting value by the end of the term. the capital will be reduced by 1.25 per cent for every fall in the index below 95 per cent.
The capital secure option offers a lower level of growth at 45 per cent and full capital protection. If the closing level of the index is at least 95 per cent of the starting value, investors get a total return of 145 per cent. But if the index is lower, investors only get their original capital.
This product is similar to Scottish Mutuals income & growth plan 2, which also has a term of five years and two months. However, this is linked only to the performance of the Eurostoxx 50 index and investors risk losing their capital if it falls by 20 per cent.
Eurolifes spread of indices allow it to provide slightly higher returns and capital is at risk only after a fall of at least 35 per cent. But the downside is that the returns of one index could be diluted by another.