Product spotlight

By THIS IS MONEY
Updated: 19:00 EST, 19 July 2001

SKIPTON Building Society has launched a guaranteed growth bond with the potential of making up to 50% gross or 8.45% AER over five years.

The bond tracks the FTSE 100 during the five-year period and guarantees an absolute minimum return of at least 126%. All original invested capital is protected. The minimum investment is £2,000, maximum is £10,000.

There are no management fees or handling costs and the offer will close on 14 September 2001. The FTSE will be noted at the close of business on 2 October 2001 and then on 2 October each year until maturity in 2006. Levels in each year will be measured against the reading for each preceding year.

A fixed interest rate of 5.25% gross will be paid on any capital invested until 1 October 2001. To find out more call 0800 446776 or call into a Skipton branch.

This Is Money says: If you're a cautious investor but want the potential of high gains from equity exposure then this could be a good option for you. Capital is protected so you won't lose out completely if the stock markets fall over the five-year period. This is a medium-term investment so chances are returns will be favourable. As ever, seek independent advice first to see if this product is suitable to your needs as minimum investments are relatively high.

Looking for a bit of added security with your investment in a bearish market? Merrill Lynch HSBC has launched a FTSE100 protected growth PIP which offers capital protection over three years and a potential gross return of 35%.

The offer, which will close on 6 September, requires a minimum investment of £5,000. For more information contact 0845 630405 or visit www.mlhsbc.com.

This Is Money says: PIPs are designed for those investors looking for some stock market exposure but who want the added security of capital protection. You're not taking a great deal of risk - so don't expect the returns to be too high - 35% over three years is nothing spectacular from equities. However, the potential is there for higher gains. Minimum investment is high since Merrill Lynch HSBC markets itself as the investment service for the mass affluent. Get independent advice is you're unsure if this is the right investment for you.