View more on these topics

Woolwich brings out bonus bond

Woolwich Plan Managers has established the 7% bonus bond, a guaranteed equity bond designed to pay 7 per cent income a year over a six-year term.

The bond is linked to the performance of three stockmarket indices the Dow Jones Eurostoxx 50, FTSE 100 and Nikkei 225 indices. Investors will get a full capital return regardless of the performance of the indices but income will depend on how they perform.

If each index is at or above its initial level at the end of each year, investors will get 7 per cent income for that year. If the index falls within each period, no income is payable and it will be rolled over to the following year.,

For example, if the index falls in year one, no income is payable but the potential income payable in year two will be 14 per cent. Again, if the index falls in that year, the income will be rolled over into the third year so 21 per cent could be paid and so on.

To get the maximum of 7 per cent a year, there must be no falls in any of the indices and investors will be taking a risk on the likelihood of this happening. A good feature is that the rollover aspect means investors still have the chance to recoup any income payments that they miss out on, but as the same criteria is use across the indices every year, investors are still up against the same odds.

Any fall in the indices will wipe out eligibility for income so there is a risk that investors could end up with just their original capital.

Recommended

Blots on the landscape – Patrick Gayle

It is approaching crunch time for IFAs, who are just weeks away from deciding their future and whether they will retain their independent status. As the debate continues to rage, however, I am astounded at the number of market commentators who are completely missing the point.

Brothers in alms

The Smiths are keen to implement a savings strategy for their two children – James, who is seven, and new arrival Matthew.The grandparents have said they will help but the Smiths are confused. What should they be advised?

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    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

    Email: customerservices@moneymarketing.com