Merrill Lynch HSBC, the online partnership between Merrill Lynch and HSBC, has unveiled the Eurostoxx protected investment product (PIP).
This capital guaranteed Tessa Isa has a three-year term and tracks the performance of the Eurostoxx 50 index. Investors who hold the PIP full term get their original capital returned plus a minimum return of 6 per cent. The maximum growth potential is 50 per cent of any growth in the index.
To get more than the minimum return, half the increase in the index must be higher than the 6 per cent minimum. Where this happens, investors get 50 per cent of the growth in the index.
The Eurostoxx PIP could be of interest to cautious investors with maturing Tessas who do not want to risk the Tessa money they have already built up. The minimum return ensures that investors do get something on top of this whatever happens, which could put some investors' minds at rest. However, the maximum growth potential of 50 per cent may be too low a cap when stockmarkets could be heading upwards from recent lows.
The Eurostoxx 50 index rose from 3360.24 points on January 22, 1999 to 3524.83 points on January 22, 2002.