Skipton Guernseys five-year guaranteed growth bond is aimed UK and offshore investors. Designed for those who are looking for growth by investing in the stockmarket it could also be attractive to those who want a guarantee of their original capital.
The bond will track the performance of the FTSE 100 index over a five year term, with investors guaranteed to get at least 126 per cent of their original investment back. The capital will be protected by being invested in corporate bonds provided by banks in London that have a credit rating of A or AA, and which are financially stable.
Investors can get a maximum of 50 per cent growth over the term of the bond. This will be measured by noting the level of the index on October 2, 2001 and then on October 2 every successive year until the final maturity level on October 2, 2006. For every year that the FTSE 100 has increased in value, the investor will get a guaranteed 8 per cent return, as well as a 10 per cent bonus in the final year if the index has grown during all five years.
The FTSE 100 index went from 3770.6 points on August 2, 1996 to 5584.5 points on August 2, 2001.