Guaranteed investment specialist Manor Park has established three guaranteed growth bonds which are linked to the performance of the FTSE 100 index.
One of these bonds is the Manor Park guaranteed UK selected growth fund, which has a three-year term. It allows investors to choose the level of capital protection they want and the returns investors receive, depend upon the capital protection they have chosen.
Investors get percentage of the average growth in the FTSE 100 index which vary according to the capital protection chosen. Those who go for 100 per cent capital protection receive 45 per cent of the average growth in the FTSE 100. If 95 per cent capital protection is chosen, investors get 85 per cent growth in the index. Protecting 90 per cent of capital provides 125 per cent growth in the FTSE 100, while capital protection at 85 per cent provides 165 per cent of growth in the index. Where there is no growth in the index, investors get the percentage of capital that they protected at the start of the term.
The Manor Park fund recognises that investors have different attitudes to risk and this is a good feature. It provides higher returns than some offshore guaranteed products such as Britannia Internationals guaranteed capital equity bond, which has growth potential of 38.25 per cent after five years and no capital protection choices.
However, the three-year investment term may not be long enough to rise out the current stockmarket turbulence, so there is a chance that investors may end up with little above the capital return.