Group issues tracker bond

STRONG demand from a risk-averse public has prompted New Ireland to issue its seventh tracker bond in 2002.

Investment sales manager Niall Tinney says the product, which closes to investors on December 20, offers 100% capital protection and “all of the growth”.

With investors still nervous about stock markets despite the 15% growth over the past four to six weeks, New Ireland believes punters crave the safety of the tracker-type investment.

They are also nervous that markets are off 40% from their previous highs and of the continuing uncertainty in markets due to concerns about US recovery.

Into that maelstrom the Bank of Ireland subsidiary has launched its latest product offering.

Smart Tracker 7 offers 100% of the growth in the composite index, combined with a 100% capital guarantee at tracker maturity.

It also offers the prospect of significant early maturity values at the end of years three, five or seven.

Smart Tracker Seven will invest in some of the world’s “strongest” markets in equal proportions as follows: FTSE 100, S&P 500, Nikkei 225 and the SMI.

If the basket of indices is up 30% or more after three years, the tracker automatically matures and a growth rate of 30% is paid out.

Otherwise, after five years, if the basket is up 50% or more, the bond matures and 50% growth will be paid.

Alternatively, if the tracker hasn’t already matured after seven years and the basket is up 70% then the bond matures and a growth rate of 70% will be paid.

Mr Tinney said: “The real innovation here is that Smart Tracker Seven offers the best of all worlds: an absolute guarantee on your capital, 100% participation in the stock market growth at tracker maturity, and an opportunity to gain excellent early maturity values.”

New Ireland also announced their Guaranteed Worldwide Tracker Bond, which commenced on November 1, 1996, is set to mature.

The company will pay out a total return of 30%, which compares favourably with the returns being given in the current market climate.

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