Investlife Luxembourg, a sister company of Pinnacle Insurance, has introduced the premier income and growth bond that is linked to the performance of eight industry sectors across Europe including the UK.
The premier income and growth bond tracks the performance of the largest stocks in the auto, energy, banks, insurance, food & beverages, media, chemicals and health sectors. These stocks are a breakdown of the largest 600 companies in Europe including the UK.
Investors can choose annual income of 10.25 per cent, quarterly income of 2.4 per cent or growth at 60 per cent at the end of the five-year term. If there is no growth in the sectors, investors get all their original capital back. But if one sectors is lower at the end of the term than it was at the start, investors get their original capital less the income they have already received.
Investors who are looking for high levels of income, a capital guarantee and the tax benefits of an offshore product may consider this bond as an addition to their existing portfolio. With stockmarkets and interest rates being so low, there is a demand for this type of product. However, investors should be aware that they risk coming away with only their original investment after five years.
The bond is very similar to Baronworth Investment Services' high income and growth bond, which was set up in conjunction with Investlife Luxembourg. The Baronworth bond is linked to the same eight sectors, but has higher returns at 2.44 per cent a quarter, 10.45 per cent a year and 61.2 per cent growth at the end of the five-year term.