Jersey-based London Pacific Assurance has introduced the guaranteed Euro return bond.
The product is a guaranteed offshore bond, designed with the risk averse investor in mind who wants to add a low-risk product to an existing portfolio and who is attracted by a guaranteed return.
Guaranteed euro return can run for either three or five years and will invest in a spread of European investment-grade corporate bonds. These are corporate bonds which have a rating of BBB and above, so that they have a lower return but are also lower risk than non-investment grade bonds, that offer a higher return but at a higher level of risk. London Pacific has yet to decide which companies the bonds will be bought from.
Regardless of what happens to the underlying bonds, at the end of the term the bond will return all of the original capital.
As a limited offer it will be withdrawn when it is fully subscribed. London Pacific feels that with interest rates low and inflation even lower, the bond will provide a good return for investors. It also fits in with London Pacifics range of guaranteed bonds, which invest in sterling and US dollars.