HSBC in London last week launched its first equity-linked investment product combining both an annual income coupon and growth on capital invested. Both a five-year and six-year version of the structured deposit account are on offer to investors until Dec. 15. Assets invested in the account are split 50/50 between an income account linked to the Bank of England base rate and a capital-protected call option on the FTSE 100, which will offer investors 50% participation in the upside of the index over the term of the investment.
Chris Taylor, director of U.K. structured products distribution in London, said the HSBC Guaranteed Capital Account is the first of a planned series of launches that will continue next year. HSBC structured and will hedge the account internally. "This is very important to us," he added, noting many other retail investment products in the U.K. market are sold under one brand name, but in fact structured or hedged by an investment bank, which sometimes dilutes the credit quality of the product. This is similar, said Taylor, to an investor buying a Rolls Royce, believing in the integrity that the brand implies, but upon driving it down the road and encountering a problem the investor lifts the hood to find an imported Fiat engine.