Ulster Bank Emerging Markets Bond

[sole]

Just been given the Ulster bank brochure for Emerging markets Bond. For 3years 11mts or 5 year 11 mts. Guarnteed to get your capital back. Linked to economies in Brazil, Russia, India and China.
Must be left for full term.
Any advice on this. Not much further info in brochure.
What about economies of these countries?
Frank

 

[ClubMan]

Any advice on this. Not much further info in brochure.

I presume that this is a tracker bond? If so then are you familiar with the various pros and cons of such products? If not then you should read up on them first. Try the key topics thread in this section for some relevant reading. For example Brendan here has fairly definite views on them:

[FONT=Verdana, Arial, Helvetica, sans-serif]TRACKER BONDS[/FONT]

[FONT=Verdana, Arial, Helvetica, sans-serif]Do not confuse these with tracker funds. A tracker fund is a very sensible low cost investment which buys the shares in an index and which rises and falls in line with that index.[/FONT][FONT=Verdana, Arial, Helvetica, sans-serif]
[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]A tracker bond is a completely different animal. You invest for a fixed period - say 3 years. The bank links your return to the return on the index its tracking. But this is often capped at 10% a year or 50% of the return on the index. They also provide some form of guarantee e.g. that you will get at least 70% of your money back.[/FONT]

[FONT=Verdana, Arial, Helvetica, sans-serif]Avoid these products - they make a lot of money for the banks and brokers who sell them and very little for the unfortunate consumers who buy them.[/FONT]

Personally I wouldn't necessarily be so dismissive of them but from what I've seen they don't suit most people especially when the terms & conditions, charges and (realistic rather than projected) potential returns are often so hard to pin down.

 

[ph4t]

Just been given the Ulster bank brochure for Emerging markets Bond. For 3years 11mts or 5 year 11 mts. Guarnteed to get your capital back. Linked to economies in Brazil, Russia, India and China.
Must be left for full term.
Any advice on this. Not much further info in brochure.
What about economies of these countries?
Frank

Goldman Sachs coined the phrase "BRICs" in 2003 in [broken link removed].

Main point:

"Over the next 50 years, Brazil, Russia, India and China—the BRICs
economies—could become a much larger force in the world economy. We
map out GDP growth, income per capita and currency movements in the
BRICs economies until 2050.​

The results are startling. If things go right, in less than 40 years, the BRICs
economies together could be larger than the G6 in US dollar terms. By 2025
they could account for over half the size of the G6. Of the current G6, only the
US and Japan may be among the six largest economies in US dollar terms in
2050."​