NDF Administration has unveiled the seventh tranche of its extra income and growth plan, which is linked to the performance in the Eurostoxx 50 index.
This stockmarket linked bond is available as a direct share investment in a Dublin based closed ended investment company, an individual savings account (Isa) or a personal equity plan (Pep) transfer.
Investors can choose a growth option of 33 per cent at the end of the term, which lasts for three years and two months. Alternatively, they can go for annual income at 10.1 per cent a year or 0.77 per cent a month over three years.
The original capital will be returned providing the level of the Eurostoxx 50 index does not fall by more than 19 per cent during the term. A fall of 20 per cent will reduce the capital by 20 per cent. Falls above 20 per cent will erode the capital by 2 per cent for every 1 per cent fall in the index.
This illustrates that the investment does not have a full capital guarantee and some investors may feel that the 20 per cent safety net will not provide a sufficient degree of capital protection. Other investors may feel that the high returns justify the level of risk involved, especially if the stockmarket swings upwards from its current low point.
The Eurostoxx 50 index rose from 3587 points on May 19, 1999 to 3771.04 points on July 19, 2001.