120% of UK market performance at NO RISK – Act quickly!

One of my favorite investment products available from National Svings and Investments is the Guaranteed Equity Bond (GEB). Unlike other bonds which pay a fixed rate of income, the returns on this are linked to the performance of the FTSE100. On top of that, any upside performance is further improved by an extra 20%. That’s right, the bond pays 120% of a major market index over a 5 year period. What’s even better, is your starting capital is also guaranteed – so you can’t lose money.

Although my outlook for the UK stock market is a little shaky with geopolitical and economic shocks quite possible, the GEB protects your starting capital. This isn’t the whole truth though – the bond doesn’t pay inflation or interest, so in an inflationary environment such as the one we’re in at the moment your capital may lose a significant part of it’s buying power. That said, you’re protected from major market crashes. Downsides are having your capital tied up for the five year term, and having to pay income tax on all gains.

Those in the UK currently looking at index funds should look at their time horizon, and make a judgment call on the state of the market. GEB’s could be an excellent mid term investment.

Warning though: the bonds are only available until the 24th April at 6pm so you’ll have to act quickly if you want to take advantage.

UK National Savings and Investments Guaranteed Equity Bonds

Who can invest? Anyone aged 18 or over
Minimum purchase £1,000
Maximum holding £1,000,000 (or £2 million joint)
Investment term 5 years, no withdrawals during the term
Potential returns 120% of any growth in the FTSE 100 index over the 5-year term (subject to averaging)
Tax status Taxable, paid gross


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