Guaranteed Equity BondsGet the knowledge to manage your investments

Every so often the financial services marketplace generates new products. In spite of what you may think, this isn’t done exclusively to confuse the public! The intention is to find new ways of offering people opportunities to maximise their return on investment and, it must be admitted, the provider’s profits. Good examples of these types of products are the guaranteed equity bonds – sometimes referred to as guaranteed equity bonds. Once again, there is no such thing as a single definition of guaranteed equity bonds. Different providers will offer different individual products that they will call a guaranteed equity bond. It is necessary to look at them on a case-by-case basis to assess their pros-and-cons but you’ll probably find that most of them share certain characteristics; they offer a variable rate of return on your capital investment, they are linked in one form or another to the stock market, and your capital should be safe and guaranteed to be protected. More info

So, how do guaranteed equity bonds work? They all start with the assumption that you have some capital and want to see it grow at above a typical savings account interest rate. The provider will take your money and use it to ‘do things with’ though in the case of most guaranteed equity bonds this may not be buying shares – in fact you may never know what the money is used for just as you don’t in many standard savings accounts. What they will tell you is that they will link the amount of growth your money will receive over a specified period of time to the average growth of the stock market / FTSE100. They may cite an average target earnings level that you may hope to achieve or some may offer a minimum target level based upon certain assumptions such as the markets not declining over a lengthy period. For guaranteed equity bonds, as with any investment product, it may be advisable to seek advice from a specialist finance provider – they can be found through the Internet. Less