View more on these topics

Triple index approach for Skipton Guernsey

Skipton Guernsey is taking the three-index approach with its five-year guaranteed growth bond.

This is a guaranteed equity bond aimed at investors who want growth from investing in the stockmarket, but who also want the reassurance of having their capital protected.

Over the five-year term the bond will be linked to the FTSE 100, S&P 500 and Eurostoxx 50 indices. The level of each index will be measured at the start of every year to see if they have risen or fallen. If all three have risen over one year then the investor gets a return of 8 per cent. However, if two have gone up and one has fallen, the investor will not get any return.

If the three indices rise for all five years then investors can get a maximum return of 50 per cent of any growth. If they have increased over any four years this drops to 32 per cent and over three years it falls to 24 per cent. The minimum return possible, even if all three fall over the five years, is 22 per cent plus the original capital.

Over a five-year period from November 26, 1996, to November 26, 2001, the FTSE 100 went from 4,068 points to 5,302 points, the Eurostoxx 50 went from 1,801 points to 3,766 points and the S&P 500 went from 1,169 points to 1,152 points.

The five-year guaranteed growth bond is similar to the capital safe bond from Newcastle Building Society. This tracks the FTSE 100, Eurostoxx 50 and Nikkei 225 indices over a five-year period, with the original capital guaranteed.

The Newcastle Building Society product offers up to 85 per cent of the average growth in the three indices, compared to the 50 per cent maximum growth from Skipton Guernsey. However, the minimum return from the capital safe bond is just the return of the original investment, while the guaranteed growth bond offers the original investment and the 22 per cent minimum return.


To regulate or not to regulate?

I write with increasing incredulity at the prospect of the FSA giving advice to the general public.Is this not the regulator who told clients of Equitable Life not to do anything regarding transferring their investments to another provider, soon afterwards, those self-same clients having a huge MVA applied to their funds? Correct me if I […]

Number nne from NDF

NDF Administration has unveiled the ninth tranche of its extra income and growth plan, which is linked to the performance of the Eurostoxx 50 index over a term of three years and two months.This guaranteed equity bond offers investors an annual income of 10.25 per cent a year, quarterly income of 2.35 per cent or […]

The FSA comes into its own

In just a matter of days, the moment the industry has been anticipating for over four-and-a-half years will finally arrive. Bar some unforeseen occurrence between now and midnight on Friday, November 30, the financial services industry will finally have a single regulator replacing the hotchpotch of bodies overseeing its activities.While images of the UK dramatically […]

&#39Baby bonds&#39 for all but single firm for gateway

Providers from across the market would be encouraged to offer child trust funds while the savings gateway would be limited to one provider under Treasury proposals released in its Pre-Budget Report.The child trust fund would either be available through an open market where providers could compete to offer the products or a limited pool of […]

Large-cap growth alpha thesis: seeking risk-adjusted excess returns

Content supplied by Loomis, Sayles & Company — an affiliate of Natixis Global Asset Management For mutual fund investors and managers of large pensions or endowments, a major challenge is to identify those portfolio managers who are most likely to deliver superior risk-adjusted returns in the future. Understanding how an investment philosophy informs a manager’s decision […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm