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Newcastle offers five-star bond

Newcastle Building Society is offering a capital guaranteed bond deposit account linked to the performance of five externally managed funds.

The guaranteed five-star bond gives investors 80 per cent of the average growth of all five funds but with the safety net of returning the initial investment even if the funds&#39 performance is negative.

The five funds are Credit Suisse US bond, Fidelity European growth, Franklin Templeton mutual beacon, IFDC Japan dynamic and Merrill Lynch offshore sterling trust UK.

There are no restrictions on potential growth and the term of the investment is five years. Newcastle says it is the first product of its type to be launched by a UK society.

The society says the investment is dripfed into the product over the first year, preventing all of it being invested at a set time.

The bond is available as direct investment or Isa, Toisa, Sipp or SSAS.

Minimum investment is £1,000. Investors can track the performance of their investment on Newcastle&#39s website.

Chief executive Robert Hollinshead says: “We are delighted to be able to add the bond to our range of capital guaranteed products.

“People can now benefit from building society acc-ounts linked to both active and passively managed funds with absolutely no risk to their initial capital.

“By actively picking the stocks and bonds to include in their funds, these five managers have achieved outstanding results.

“They have also been awarded the prestigious Stan-dard & Poor&#39s Micropal five-star ratings based on their superior performance to other managed funds in their investment sectors. Because investors&#39 money is effectively dripfed into the investment over the first year, this give people the peace of mind that their money is not committed at a specific point in time which is particularly valuable at a time of stockmarket volatility.”

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