The product is a guaranteed income/growth bond, with the investment management provided by Abbey National Treasury. The investor will buy shares in Census, an investment company based in Ireland. Census will then invest in the Dow Jones Eurostoxx 50 index over a three year period.
During this time if the Eurostoxx 50 index falls by 20 per cent over the three year term, investors capital will reduce by one per cent for every one per cent fall in the index. If the index falls by more than 20 per cent then capital reduces by two per cent for each one per cent fall in the index beyond this point. This means that the capital is not guaranteed.
The doubling of the erosion of capital to two per cent beyond a fall of 20 per cent is very steep and could penalise the client in the event of a market correction. However the Eurostoxx 50 index has traditionally been stable over the long term and extra income and growth 4 should appeal to clients seeking this kind of product.
A maxi Isa version of the plan is also available as well as a pep transfer option.