We would like to correct any impression that Azarat's new service (Osiris) (MM, September 26) focuses solely on return of capital or indeed that a “red status” necessarily implies a bond will fail to return capital.
The green, amber and red indicators are supplementary to the full Osiris reports and are meant as a simple guide to the health of the investment from the perspective of the investor.
The intention is to reflect actual performance in the light of reasonable expectations at the time that the investment was made.
In the case of bonds with guaranteed capital return, such as the bonds from Skipton mentioned in the article, this translates to zero income or growth.
In bonds based on more complex models it may additionally reflect capital at risk or overall negative returns.
Each full Osiris report lays out the criteria affecting overall return and degree of capital protection offered by the bond, alongside graphics and charts mapping the performance of the underlying instruments or indices to the specific model.
These combine to provide a clear view of the current status of the issue.
A number of sample reports, including those mentioned in the article, can be viewed at www.azarat.com.