Bank of Ireland Life Investor Sentiment Index reveals flight to capital secure bonds

Today, 4th March 2009, Bank of Ireland Life announces the launch of two new ways of investing with the safety net of capital security. In the current climate of low interest rates, market uncertainty and poor investor confidence, many customers with lump sums are looking for security with some opportunity to grow their money.

According to Bank of Ireland Life’s recent Investor Sentiment Index, a survey conducted with over 160 Investment Advisers* nationwide, there has been a noticeable shift towards more cautious investments. Highlights of the survey include:

  • 94% of Investment Advisers agreed that customers with new money to invest are now adopting a more risk adverse investment strategy due to current market conditions
  • 78% of Investment Advisers stated that new investors were more likely to invest in capital secure investment products in the current interest rate environment
  • While 55% of Investment Advisers agreed that existing investment customers continue to see the long-term value in having a diversified equity based portfolio
  • A sign of our times, 100% of Investment Advisers agreed that customers are taking a greater interest in their personal finances than ever before

Based on this recent research, the timing of Bank of Ireland Life’s two new capital secure investment bonds for investors is ideal.

1. Secure Advantage:

Bank of Ireland Life’s new unique capital secure product solution – Secure Advantage, available from 4th March 2009, will help investors by managing market volatility in a truly dynamic manner, while the 100% capital security feature at maturity will provide peace of mind. No matter what happens in the market place or to exchange rates, a customer’s original investment is protected on the maturity of the bond.

Secure Advantage offers investors the potential for growth with the security of their original investment over the five year, eleven-month term of the investment bond. The return that the investor receives is based on the performance of two leading well-diversified global equity indices – the MSCI World Index and the Dow Jones Eurostoxx 50 Index.

The first of its kind in the Irish market, Secure Advantage will provide investors with a way to invest comfortably, despite market volatility, by managing the equity exposure of the fund in a dynamic manner on a daily basis. Each working day, the actual volatility experienced by the two indices will be analysed. If the result shows that markets are becoming more nervous and volatile, we will quickly reduce the exposure of a customer’s investment to the share indices – potentially limiting losses. Similarly if the outcome shows that actual volatility is low, indicating the market is steady, we will quickly increase the exposure to the stock markets, with a view towards boosting the performance of a customer’s investment. Our research shows that this is an effective means of managing our customer’s money in a relatively low risk manner.

2. Secure Plus:

Bank of Ireland Life are also launching the fifth series of its highly successful Secure Plus – Investment Bond. The life company has reported investment sales of over €100 million in earlier series of the bond, the most recent of which closed to new business on the 13th February 2009.

The fifth series of the Secure Plus should appeal to medium and longer-term investors, with a 4-year 6-month term of investment, offering investors the potential to grow their investment by a maximum of 33% before life assurance tax.

Commenting on the launches, Bernard Walsh, Head of Investments, Bank of Ireland Life says; “The unprecedented market volatility experienced over the last number of months has driven down the valuations of many asset classes around the world. Some of the world’s leading investors are using this opportunity to buy quality assets at heavily discounted prices to take advantage of the ‘buy low sell high’ philosophy of investing. Our two capital secure investment products offer cautious investors the chance to take advantage of this great buying opportunity with the comfort of a 100% capital security at maturity. Growth expectations have been pared back to more realistic levels and a priority for many of our customers should be to achieve a return that exceeds that currently available from deposits.”

*The Bank of Ireland Life Investor Sentiment Index surveys over 160 Investment Advisers working across 265 Bank of Ireland branches nationwide.

ENDS 4th March 2009

Notes to Editors:

Key Features of Secure Advantage:

  • 100% Capital Guarantee provided to Bank of Ireland Life by the Governor and Company of the Bank of Ireland. The capital guarantee applies at the maturity date only. If the Governor and Company of Bank of Ireland is unable to meet its commitment to Bank of Ireland Life, then you could receive less than you invested.
  • Diversified equity investment – an equity investment that tracks two leading global indices (MSCI World and Eurostoxx 50)
  • Dynamic investment strategy:
    • In times of high volatility – exposure to equities will fall
    • In times of low volatility – exposure to equities will rise
  • Term: 5 years 11 months
  • Minimum Investment: €5,000
  • No partial or full encashments allowed during the policy term
  • The fund will close to investment on 14th April 2009.
  • Protected Return – returns are based on the closing values of the above indices over the final 12 months of the investment term. This protects investors from any last minute falls in markets as investors approach the maturity date. However, reducing risk in this way may adversely impact performance should markets rise just before maturity.

Key Features of Secure Plus – Series 5:

  • 100% Capital Guarantee provided to Bank of Ireland Life by the Governor and Company of the Bank of Ireland. The capital guarantee applies at the maturity date only. If the Governor and Company of Bank of Ireland is unable to meet its commitment to Bank of Ireland Life, then you could receive less than you invested.
  • Highly Diversified – 3 distinct asset classes which span across 3 continents, offering an attractive diversified investment portfolio:
    • 40% – Equities: 37.5% S&P 500, 37.5% DJ Eurostoxx 50, 25% Nikkei 225
    • 25% – Bonds: iBoxx Euro Index Eurozone Bonds
    • 35% – Commodities: Tracks the performance of the Dow Jones AIG Commodity Index
  • Term: 4 years 6 months
  • Minimum Investment: €5,000
  • The fund will close to investment on 3rd April 2009.
  • No partial or full encashments allowed during the policy term
  • Protected Return – the return is averaged over the first 6 months and the last 6 months to help shield from any sudden drops in value at the start and the end of your fund term. However it should be noted that if the value of the basket of indices increases during this period then the return will be reduced.
  • Charges: No explicit charges – all charges are implicit in terms of the offer.

For further information contact:

Laura Erskine
Public Relations Manager
Bank of Ireland Life
Tel: 01 617 2586
Mob: 086 856 2929

Sharon McDonnell
Group Consumer Communications Manager
Bank of Ireland
Tel:01 604 3750
Mob: 087 226 9324

Warning: For Secure Advantage you cannot choose to cash in your investment before 20th March 2015.

Warning: For Secure Plus you cannot choose to cash in your investment before 9th October 2013.

Warning: The value of investments may go down as well as up.

Warning: This product may be affected by changes in currency exchange rates.

Terms and conditions apply. Where relevant, life assurance tax applies. While great care has been taken in its preparation, this document is of a general nature and should not be relied on in relation to a specific issue without taking appropriate financial, insurance, investment or other professional advice. The information has been taken from sources we believe to be reliable, however we do not guarantee their accuracy or completeness and any such information may be incomplete or condensed. All opinions and estimates constitute best judgement at the time of publication and are subject to change without notice. The content of this document is for information purposes only and does not constitute an offer or recommendation to buy or sell any investment or to subscribe to any investment management or advisory service. If there is any conflict between this document and the Policy Conditions, the Policy Conditions will apply. Please note that mention of specific stocks/shares or investments is not a recommendation to trade in those stocks/shares or investments.

The Dow Jones Euro STOXX 50® is the intellectual property (including registered trademarks) of STOXX Limited, Zurich, Switzerland and/or Dow Jones & Company, Inc., a Delaware corporation, New York, USA, (the “Licensors”), which is used under license. The Guarantee Plus – Series 4 which is based on the Index is in no way sponsored, endorsed, sold or promoted by the Licensors and neither of the Licensors shall have any liability with respect thereto.

New Ireland Assurance Company plc trading as Bank of Ireland Life is regulated by the Financial Regulator and is a member of the Bank of Ireland Group.