Capital Protected Tracker Bonds

[ph4t]

Is there anywhere I could get a list of all the 90% and 100% Capital Protected Tracker Bonds that are available in Ireland right now?

 

[ClubMan]

If you are considering investing in one? Are you aware of the potential negative points of many tracker bonds such as lack of transparency, potentially high charges, limited potential returns, the fact that a 90% capital guarantee effectively means a 10% investment charge, no dividends reinvested, inflexible/fixed term etc.?

 

[ph4t]

If you are considering investing in one? Are you aware of the potential negative points of many tracker bonds such as lack of transparency, potentially high charges, limited potential returns, the fact that a 90% capital guarantee effectively means a 10% investment charge, no dividends reinvested, inflexible/fixed term etc.?

No I'm just doing some research on whats available.

I'm aware of their downsides but there is no denying that they are attractive to less sophisticated investors.

The list I have come up with so far is below. Are any missing?

BCP Double Growth Bond 23
BCP Quadruple-Plus Growth Bond 6
Caledonian Life With Profits Bond
Canada Life Active Guaranteed Bond
Canada Life Guaranteed Investment Bond
Eagle Star Corporate Deposit
Eagle Star Guaranteed Deposit
Eagle Star Protected Dynamic Investment Bond
Eagle Star Unitised With Profits Bond
Friends First Capital Investment Bond
Friends First Protected Equity Plus Bond
Friends First Protected Insight Currency Bond
Friends First Protected Investment Bond Series 8
Hibernian Spectrum Bond Guaranteed Fund
IIB Bank The Titan Bond II
Irish Life Protected Consensus Bond
Liberty Asset Management Flaghship Fund IV
New Ireland Guaranteed Evergreen Fund
Ulster Bank Emerging Markets Bond (Option 1)
Ulster Bank Emerging Markets Bond (Option 2)

 

[sole]

Been looking at Ulster Bank Emerging Markets Bond. I have no indication in brochure of an option 1 or 2.
They seem to guarnteee 100% capital. Otherwise I have no idea how to figure out what to expect on maturity.
frank

 

[ph4t]

Been looking at Ulster Bank Emerging Markets Bond. I have no indication in brochure of an option 1 or 2.
They seem to guarnteee 100% capital. Otherwise I have no idea how to figure out what to expect on maturity.
frank

Option 1 has a 3 years 11 months term with a profit cap of 30%

Option 2 is 5 years 11 months with a profit cap of 60%

 

[CCOVICH]

Can you clarify-does the 30% cap apply to the overall return (i.e. your return on investment), or is the gain in uplift in fund value capped at 30%?

E.g. You invest €1000. The cap on return is 30%. The par value of the fund is €1000 at investment. At maturity, the fund is worth €1500. Your return is €1,300 (if the cap is 30% of amount invested), but only €1,150 if the cap is 30% of the uplift.

 

[ph4t]

Can you clarify-does the 30% cap apply to the overall return (i.e. your return on investment), or is the gain in uplift in fund value capped at 30%?

E.g. You invest €1000. The cap on return is 30%. The par value of the fund is €1000 at investment. At maturity, the fund is worth €1500. Your return is €1,300 (if the cap is 30% of amount invested), but only €1,150 if the cap is 30% of the uplift.

Your return would be €1300.

But that product isn't a fund. I presume its a tracker bond so the way it works is that 10% of your investment buys options on the 4 indices, while 80% is used to buy a zero coupon bond.

 

[GreatDane]

Hi

There is also a First Active one doing the rounds me thinks, sorry no details on it and I'm not well up on these products so not trying to promote it etc.

As a rule, I've been led to believe (right or wrong), that these type of products tend to have higher charges & lower returns than equivalent products without capital guarantees.

However, one of the attractions beside the capital guarantee feature, appears to be that they accept lower entry amounts than other types of investments, so someone with as little as €3k might be able to invest, where they are excluded from some other investment products.

Anyone got a view ?

 

[CCOVICH]

Your return would be €1300.

Do the terms and conditions support this, or is it your own view?

But that product isn't a fund. I presume its a tracker bond so the way it works is that 10% of your investment buys options on the 4 indices, while 80% is used to buy a zero coupon bond.

When I say 'fund', I mean the pool of money that has been invested. What people buy is a 'bond' based on the underlying fund.