Closing date: 

18 December 2002

Initial Index Level = 3,900.60

Final Index Level = 6,476.90

Investment Type = ISAble Medium Term Note based investment plan, linked to the FTSE 100

Inferred investment period 5 years

Minimum actual investment period 5 years 3 weeks

Headline Rate 200% of the rise in the FTSE 100 Index over 5 years subject to a maximum investment return of 80%

Market Protection level: 50%

Final Index level: The closing level of the index on 30 December 2007

Capital Return: Capital will be returned in full unless the FTSE 100 Index falls by more than 50% from its starting level AND does not regain to at least its starting level by 30 December 2007. If this is the case then the capital returned will be reduced by 1% for every 1% the closing level is lower than the starting level.  

If closing level of the index is 5% down capital return would be £10,000 providing the index had never fallen by more than 50% (in which case the payout would be £9,500)

If closing level of the index is 30% down, capital return would be £10,000 providing the index had never fallen by more than  50% (in which case the payout would be £7,000)

If closing level of the index is 30% up, capital return would be £16,000 even if  the index had fallen by more than  50% during the term.  Tax free as ISA or PEP.

Summary: In our opinion, this is  the best growth stock market bond or structured product we have seen in our 31 year history.  Quite an accolade perhaps, but in our view Keydata have managed to construct a contract which is simple to understand, easy to monitor, and provides a significant 200% growth on the index it measures while also offering significant downside protection.  Of course there are downsides, namely if the market grows by more than 80% over the next 5 years it would have been better to be in an investment tracking the index where the gain is uncapped. Also if the market were to move sideways and for example ends in an identical position then only the return of capital would be received, unlike many stockmarket bonds which in this event would qualify for payment of the headline growth rate stated at outset. Taken in the context of the current position of the FTSE 100 Index, the opportunity for 200% participation in the upside, albeit capped, and limited exposure to the potential downside is in our view likely to prove extremely attractive to virtually anyone seeking accelerated growth on their investments and those wishing to buy into a market now that it has fallen, but wish to limit their risk. 

This plan returned £18,000.  Taking into account the overall investment period, this gives an annualised gain of 12.32%.