Guaranteed investment specialist Manor Park has established a guaranteed growth bond that is linked to the performance of the FTSE 100 index for five years.
The Manor Park guaranteed UK capital growth fund allows investors to choose the level of capital protection they want between 110 per cent and 85 per cent. The lower the level of capital protection they choose, the higher the returns above the original capital. Returns are based on a percentage of the average growth in the FTSE 100 index.
Investors who go for 110 per cent capital protection receive 40 per cent of the average growth in the index and those who opt for 85 per cent capital protection receive 190 per cent of the average growth in the index. In between these scales, there are options to protect 105 per cent, 100 per cent, 95 per cent and 85 per cent of capital.
The Manor Park bond offers more capital protection choices than similar offshore products such as Irish Life International's secured growth bond 9, which is linked to the FTSE Eurotop 100 index. This bond provides 100 per cent or 90 per cent capital protection, but the percentage of average growth in the index that it passes on to investors is lower than the Manor Park product.
However, the Irish Life International product may be more suitable to clients who are not based in the UK because it offers a currency choice between sterling and euros. These investors may prefer exposure to be diversified across European stocks including the UK, rather than Manor Park's focus only on the UK.