Zurich Financial Services is offering investors the chance to invest in a capital-protected bond that is linked to the FTSE 100 and Halifax House Price indices for five years and six months.
The select guaranteed account is available to those with between £2,500 and £250,000. Investors decide whether they want their investment linked to the FTSE 100, Halifax House Prices index or a combination of the two. If they choose a combination of indices they decide how much to invest in each element. In addition to a full capital return, investors will receive 100 per cent of the growth in their chosen index or indices.
When calculating the returns, the closing level of the FTSE100 is recorded on July 30, 2004 and the non-seasonally adjusted Halifax House Prices index for July 2004 will be used as a starting point. In both cases, these figures will be compared with an average produced over the final year of the term.
This product is currently the only product of this type, although Skipton Building Society provides exposure to the Halifax House Prices index through its guaranteed triple asset bond. However, the Skipton product is not directly comparable with the Zurich product as it has an income element via a high-interest account that pays 8 per cent gross a year. The remainder is linked to the FTSE 100 and Halifax House Prices Index and offers 75 per cent growth in these indices.
Investors would need to decide whether it is worth getting a lower element of growth over a slightly shorter term with Skipton plus the fixed rate of income or whether no income and a higher level of growth over a slightly longer term with Zurich will best suit their needs.