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Opportunity to pick bond risk

Scottish Life International is offering an income and growth investment bond with two levels of risk and potential return linked to three stockmarket indices.

The select income and growth bond 2 gives the choice of two risk options – opportunity or cautious – and returns can be income or growth. Returns are linked to the FTSE 100, the S&P 500 and the Euro Stoxx 50 indices.

The opportunity option offers 10 per cent gross income each year for three years or 2.4 per cent gross income per quarter or 32 per cent gross growth at the end of the three-year term.

The cautious option offers 8 per cent growth income each year for three years or 1.9 per cent income per quarter or 25.5 per cent growth at the end of the term.

For a full return of capital on the opportunity option, all three indices must stand at or above their initial levels by August 29, 2005 and remain above their initial levels until September 26, 2005.

No capital is lost, provided that none of the three stockmarket indices falls by more than 30 per cent from their initial levels at any time.

For the cautious option, even if one or more of the indices fall by more than 30 per cent, investors will still receive a full return provided all three indices recover to 85 per cent of their initial levels by August 2005.

Director of marketing development Neil Lovatt says: “With interest rates now at historic lows, many savers are looking for higher returns than savings accounts can offer – but with more security than direct investment in stockmarkets, where performance has been volatile over the last three years.”

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