Pinnacle Insurances protected bonus bond plus is a single-premium insurance bond linked to the Nasdaq-100 index.
The bond is aimed at investors who have a cautious attitude to risk, who want to invest in potentially rewarding area of the Nasdaq over a period of five years and are reassured by the capital guarantee that the bond offers.
The bond will be linked to the performance of the index, with its performance measured at the start and end of every calendar year. The maximum return for the investor is 18 per cent of the growth in the index a year, so that the maximum possible return will be 190 per cent of the original investment at the end of the five-year period.
The minimum return an investor will get is 120 per cent of the original investment, in the event that the Nasdaq 100 does not grow.
Although the bond offers large rewards it must be remembered that the Nasdaq 100 index has been highly volatile since the start of 2000. However over a five year period the Nasdaq 100 index rose from 1063 points on November 10, 1995 to 3200 points on November 9, 2000.