nvesta, formerly Eurolife Fund Managers, has established the nvesta plus plan, a guaranteed equity bond that is linked to the FTSE 100, S&P 500 and Nikkei 225 indices.
The bond is split into two options, which both have further option for growth, annual income or monthly income.
Under the secure option, investors can choose growth of 40 per cent, annual income of 7.25 per cent or monthly income of 0.58 per cent. Investors will get their capital returned in full provided none of the indices fall by more than 35 per cent during the term.
Where the indices fall by more than this, capital will still be returned if the indices are at least 95 per cent of the starting levels by the end of the term. If this does not happen, capital will be reduced by 1 per cent for each 1 per cent fall in the index.
The dynamic option offers higher returns but less security. Investors can choose growth of 60 per cent, annual income of 9.5 per cent or monthly income of 0.75 per cent. If any of the three indices fall by more than 30 per cent during the term, capital will still be returned provided the indices recover to at least their starting levels between July 26, 2007 and September 26, 2007. If they do not, capital will be reduced by 1.25 per cent for every 1 per cent fall in the indices.
This bond aims to increase investors options, depending on the level of risk they want to take. However, this makes it more complicated and it could confuse investors.