New investments bond with guaranteed returns launched

Mon, 12 Feb 2007

A new investments bond has been launched that may be of interest to consumers looking to guarantee returns.

Available from today, Nationwide's guaranteed-equity bond will return the capital invested in the product after the initial five-year term.

Moreover, investors will also receive 65 per cent of any growth in the value of the FTSE 100 share index, the Nikkei 225 and the DJ EuroSTOXX 50 during the interim.

Alternatively, bondholders can receive a guaranteed ten per cent return on their original investments, if this option proves to offer better returns.

Clive Parkinson, managing director of Nationwide Investment Group, explained who he thought the investments option might appeal to.

"The Nationwide GEB [guaranteed-equity bond] is ideal for people who wish to invest in the stock market but have concerns about the risk involved," he said.

"The return is always more than the original amount invested."

Last week, Alex Veys, fixed-income portfolio manager at investments management group Fidelity International, told bondholders that inflationary pressures should not have a significant impact upon returns in the sector.

Mr Veys argued that concern about inflation was a "red herring" in relation to bonds .

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