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Scot Mut launches new issue of income bond


Scottish Mutual is launching a new issue of its Income Bond offering investors the choice of capital growth or regular income.


The bond will track the Dow Jones Euro Stoxx 50 stockmarket index over a fixed three year term.


The index tracks the performance of the top 50 companies in Euroland including Nokia, Unilever and Philips Electronics.


It has a minimum investment limit of £10,000 and a maximum of £250,000.


Investors looking for income can choose between the annual option offering 8 per cent net a year or the monthly option paying 0.65 per cent net a month.


Alternatively the capital growth option offers a potential return of 25 per cent on maturity.


The return of capital is not guaranteed, depending on the performance of the Euro Stoxx index over the term. Providing the index does not fall by more than 20 per cent the return of capital is guaranteed.


Early investors will receive a 0.7 per cent bonus before March 31, 2000, while investments of between £25,000 and £49,999 will receive an enhancement of 0.3 per cent and those above £50,000 will be uplifted by 0.6 per cent.


IFA commission is 3 per cent.


A Scottish Mutual spokeswoman says: “The income bond should suit clients looking for a higher rate of return than the average building society account for those investors prepared to accept some risk.”

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