NDF Administration has introduced the extra bonus plan 2.
The plan is a guaranteed growth bond that has been aimed at investors who are looking to shelter any returns from capital gains tax and who are looking for short term growth over one year.
Extra bonus plan 2 will invest in a Dublin based investment company, which in turn will invest in the Dow Jones Eurostoxx 50 index.
There are two options to the plan. The first allows for 10 per cent growth over a 13-month time frame, while the second gives access to 12 per cent growth over the same period.
The two options also come with differing degrees of risk. If the 10 per cent option is taken then the Eurostoxx index can fall by up to 25 per cent before the capital invested is affected. Any fall below 25 per cent will see the capital reduced by two per cent for each one per cent fall in the index.
However if the 12 per cent option is taken then there is no safety net, and an investor could see their capital reduced if the index falls in value.
The extra bonus plan is similar in structure to the 10.net bond from Scottish Mutual. This product invests in the Nasdaq 100 index, with capital returned in full unless the index fall by more than 25 per cent over the three year term. However, the 13-month term of the NDF product makes it more vulnerable than the Scottish Mutual product to any fall in the index, as it might not recover in time.
Over a 13-month time period the Dow Jones Eurostoxx 50 index went from 4902 points on February 2, 2000 to 4103 points on March 2, 2001.