Irish Life International has established an offshore guaranteed equity bond that is linked to the Dow Jones Global Titans index.
The eighth issue of the secured growth bond enables investors to choose a currency denomination from sterling, dollars or euros and the level of final returns will depend on which currency is chosen. Sterling versions offer a return of 75 per cent of the average growth in the index, while the return for the other currency denominations is 60 per cent of the average growth in the index.
There is also a choice of two options: protected plus A which has a term of three years and six months and protected plus B which has a five-year term. Both terms guarantee the return of the original capital whatever happens to the Dow Jones Global Titans index, but protected plus B guarantees 10 per cent growth on top.
By following the Dow Jones Global Titans index, the bond follows in the footsteps of Credit Suisse First Boston, which offered its global titans Tessa Isa earlier this year. The index consists of the 50 largest companies around the world, so it captures global diversity within a single index.
This means that it does not risk one stockmarket index pulling down the returns of another, which is a potential drawback with similar products such as Britannia International's five-year capital guaranteed equity bond.
The Dow Jones Global Titans Index rose from 152.76 points to 203.90 points in the five-year period from June 11, 1997 to June 11, 2002.