Type: Capital-protected bond
Aim: Growth linked to the performance of the Dow Jones Eurostoxx 50 index
Minimum-maximum investment: £4,000-no maximum, Isa £7,000
Term: Six years
Return: Five times the growth in the index capped at 100 per cent
Guarantee: Original capital returned in full providing the index does not fall by more than 50 per cent during the term
Closing date: August 24, 2007, August 17, 2007 for Pep/Isa transfers
Commission: Initial 3%
Tel: 0845 0091805
This capital -protected bond is linked to the performance of the Dow Jones Eurostoxx 50 index for a six-year term. It provides a return of five times the growth in the index but this is capped at 100 per cent and capital will be returned in full provided the index does not fall by more than 50 per cent during the term.
Baronworth director Colin Jackson says: “ Unfortunately, I can find very little good to say about this product except that the literature is attractively produced and easy to understand, the level of commission is in line with the market and any returns are subject to capital gains tax rather than income tax, which is a big plus.
Discussing the less appealing features of the product Jackson says: “Where do I start? Although the product offers 500 per cent of the Dow Jones EuroStoxx 50 index, the return is capped at 100 per cent. Furthermore, I do not particularly like this index as the underlying asset. If the index is ever breached by 50 per cent or more, then there is no capital protection at maturity.”
Jackson believes Meteor could face competition from Dawnay Day Quantum’s European stockmarket maximiser II, a similar product.
He concludes: “Although the headline of 500 per cent growth catches the eye, in reality, this cannot be achieved due to the effect of the 100 per cent cap.”
Suitability to market: Average
Investment strategy: Average
Adviser remuneration: Good