A fixed return on the interest portion of the latest Irish Permanent (IP) tracker bond is one of the features of this latest addition to the busy tracker market. The IP Balanced Equity Bond Issue 5 offers two investment options: a five year six month savings term or a three year nine months term in which the saver can either place 50 per cent or 25 per cent of their capital into an interest bearing portion of the account with the balance in each case into the stock market linked portion. If they choose the 50/50 option over the five years and six months term, the interest paid will be 36 per cent gross; if they choose the three year and nine month term the interest will be 18 per cent gross.
The guaranteed interest return is in addition to capital being totally secured for the term, plus there is the potential to earn 100 per cent gross on any returns from the Nikkei 300 and FTSE Eurotop 100 indices to which this bond in linked.
Minimum investment is £3,000 and the closing date is October 10th. None of the Irish Permanent's four other tracker bonds have matured but the gross returns of the first two bonds (launched in December 1995 and July 1996) have been in the region of 21 per cent gross, reflecting the general high returns from international investments.
Whether those performance levels can be sustained over the next four to six years is questionable, but the enduring appeal of the tracker bonds is that initial capital is guaranteed so long as the investment is untouched. In the case of this Irish Permanent product, the added bonus is the modest interest rate paid on a portion of the investment, regardless of the performance of the indices.
