View more on these topics

HSBC creates a new foundation

HSBC Bank International has brought out Foundation 2 – the healthcare bonus fund.

This capital-protected fund is linked to the performance of a basket of 18 healthcare-related stocks for a term of three years. Examples of holdings include AstraZeneca, GlaxoSmithKline and Johnson & Johnson.

According to HSBC Bank International, an ageing population will increase the need for healthcare and pharmaceuticals and it believes the stock basket will benefit from this.

The fund, which can be denominated in a range of currencies, will pay out a bonus each year as long as the performance of the basket of stocks is positive. To calculate the returns, each stock price is recorded at the start of the term and again at each anniversary.

The growth in each stock is measured as the difference between the two values but this is subject to a 14 per cent cap for sterling investments, an 11.5 per cent cap for dollar investments and a 9 per cent cap for euro investments. This calculation produces 18 performance figures that are added together and divided by 18 to produce an average for that year. This provides the level of bonus that will be paid and investors also get their original capital back in full at maturity.

While some investors may welcome the fact that they do not have to wait for the full three years to receive a return, the potential drawback is that investors will not know at the outset the level of return they will receive at the end of each year.

The use of a cap to limit returns from each stock may also put some IFAs off recommending this to their clients. The maximum returns can only be achieved if every stock reaching the cap. If some stocks exceed the cap, investors will not benefit from the full level of growth.


Aviva chief Thiam in Pru move

Aviva chief executive officer (Europe) Tidjane Thiam is joining Prudential as group finance director.Thiam replaces Philip Broadley and will join the Prudential board as an executive director in April 2008.Thiam has been group strategy and development director and managing director of Aviva International.Prior to Aviva, he was a partner with McKinsey & Company in France […]

The pension picture

The Money Marketing Live conference and exhibition at Manchester’s G-Mex on October 30 focuses on the pension issues, with contributions from 50 speakers and 85 exhibitors. Key industry figures will speak in the Money Marketing Pensions Arena and you could win a Mazda MX-5


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm