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Media centre /
Press releaseFTSE 100 TO SEE 'REASONABLE GROWTH', PREDICTS LEADING ECONOMIST15 October 2002Potentially high returns for investors in third issue of National Savings and Investments capital-secure Guaranteed Equity Bond The stock market could be on the road to recovery after falling to its lowest level for over six years, according to a leading economist who is predicting growth over the medium term, which would mean people who buy Guaranteed Equity Bonds could see high returns over the term of the investment. Stewart Robertson, UK economist and director of economics firm Lombard Street Research, said: "Our expectation is that the FTSE will begin to rise from its current lows and see reasonable growth over the medium term. "But nothing in life is certain and seeking protection against the risk of further falls is certainly a wise precaution for the private investor." This week, National Savings and Investments (NS&I) launches a five-year, capital-secure Guaranteed Equity Bond - on sale for a limited period from 17 October to 28 November - it offers investors the opportunity to enjoy an attractive potential return linked to the stock market with no risk to their money. Customer demand for NS&I's Guaranteed Equity Bond is high - more than 7,000 people have already expressed interest in the Bond. Gill Cattanach, Commercial Director, National Savings and Investments said: "Even though stock market turbulence has continued, we believe that many investors are still looking for the longer term potential the stock market can offer. But they are now even more keen to ensure their capital is 100 per cent secure. "Customers can invest in our Guaranteed Equity Bond certain in the knowledge that their investment can go up but cannot go down. National Savings and Investments Guaranteed Equity Bond provides this 100 per cent security because it is backed by HM Treasury." Facts about the NS&I Guaranteed Equity Bond Issue 3 Because Issue 3 has a maximum potential return or 'cap' of 65 per cent gross (i.e. before tax) investors will receive all (see editor's note 1) of the growth in the FTSE 100 Index over five years up to a maximum of 65 per cent. Some other Guaranteed Equity Bonds on the market offer a reduced 'participation' rate rather than a cap. While the reduced participation bonds have no maximum limit on returns, they only pay a proportion of the growth in the FTSE 100 Index. For example, if the FTSE 100 Index were to grow by 65 per cent, the National Savings and Investments Guaranteed Equity Bond would give a return of 65 per cent gross, i.e. 100 per cent of 65 per cent, whereas a Bond with a reduced participation of, say, 70 per cent would only give a return of 45.5 per cent, i.e. 70 per cent of 65 per cent. (Unfortunately, we no longer offer access to historical data in downloadable format.) The Bond is available for individuals or trustees (including on behalf of children) to invest between £2,000 and £1 million, and is available from 17 October until 28 November 2002, but is a limited issue so may close earlier if fully subscribed. During the six week offer period, investments will earn interest of 3.5 per cent pa gross, paid at maturity. The five-year investment starts on 29 November 2002 and matures on 29 November 2007. Even if the FTSE 100 Index were to fall over the five-year term, capital invested in Issue 3 of the Guaranteed Equity Bond will be secure and returned in full to investors. Like all National Savings and Investments products, its Guaranteed Equity Bonds are backed by HM Treasury. Investors can apply for the Bond over the phone by calling 0500 500 000 any time with their debit card details or by post by completing an application form available from 17,000 Post Office branches around the UK. There are no fees or charges. After 28 November or earlier Issue 3 is fully subscribed, a registration leaflet for future Issues will be available at all post offices to ensure details are forwarded directly to interested customers. ENDS Notes to editors
Media team The numbers below are for media use only. Customers wishing to contact NS&I can find details here.
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