A new twist to this latest product offering is market performance being linked to the S&P 500 Low Volatility Index for US dollar deposits. This index measures the performance of the 100 least volatile stocks of the S&P 500 Index and has outperformed the S&P 500 Index by more than 20% over the past five years.
Quantum PLUS 10, which is available until 31 December 2012, divides the original capital deposited equally between a deposit account (Quantum) which pays a 4% fixed rate until 14 January 2014 and the Plus portion which is held for five and a half years in a term deposit account until 23 July 2018.
The product is available in sterling, US dollars or Australian dollars, with minimum deposit amounts set at £10,000, US$15,000 or AU$15,000.
The Quantum portion pays a fixed rate of interest of 4% AER for sterling and US dollar deposits and 10% AER for Australian dollar deposits. After one year half of the deposit is returned plus interest at the relevant fixed rate.
The PLUS portion provides for a potential return on the other half of the deposit after five and a half years based on the market performance of the chosen stock market index. Sterling deposits are linked to the FTSE 100 and US dollar deposits are linked to the S&P 500 low volatility index.
For these two currencies depositors can choose the option of a return of 50% of the market performance with a 5% minimum return, or a return of 60% of the market performance with no minimum return.
Australian dollar deposits are linked to the S&P/ASX 200 and depositors can choose either a return of 70% of the market performance with a 5% minimum return, or a return of 80% of the market performance with no minimum return. Even if markets fall, all the PLUS portion alternatives will return the original capital deposited.
Adam Hunt, head of coverage, international private clients, said the product may be “suitable for clients who believe that their chosen market will rise, but who seek capital protection if this proves not to be the case."
