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RBS bond places faith in Nasdaq

Royal Bank of Scotland International and Natwest Offshore have joined forces to offer the Nasdaq guaranteed return bond issue two.

The product is a guaranteed equity bond that will track the performance of the US-based Nasdaq 100 index over a three-year period. The bond is aimed at the cautious investor who wants to invest in a stockmarket over a short time period but who does not want to risk their capital.

Investors are guaranteed at least 110 per cent of their original capital back at the end of the term, even if the index falls. If the Nasdaq rises then investors can get up to 9 per cent of the growth every quarter, which adds up to a potential maximum return of 108 per cent of the growth at the end of the three years. Every quarterly rise in the index is locked into the product which lessens the chance of a long string of bad results giving a low return.

The Nasdaq 100 has undergone a bout of prolonged losses over the past year. Initial gains from a December 31, 1997 level of 990.8 to a December 31 1999 level of 3,707.8 have now fallen back to a level of 2,441 on January 9, 2001.

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