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| Mark Donnelly, Head of Private Banking, IIB Bank, pictured at the official launch of the new Blocks+Stocks Bond, with Chardonnay and Jamie. |
IIB Bank has launched a product to match what it terms unprecedented investor demand for exposure to international property and equity markets.
Blocks+Stocks allows investors to participate in the potential returns of each asset class, both of which are considered critical to the generation of attractive returns over the medium term. However, rather than having to choose whether property is likely to perform better than equities, or vice versa, Blocks+Stocks offers the opportunity for investors to potentially benefit from both – all within a capital secure environment.
The Investment Portfolio comprises three of the world’s most recognised stock markets and property regions, namely Europe, the US and Japan. The equity component provides a highly diversified exposure to 775 blue-chip companies whose activities are spread right across the entire business spectrum. Equally, the property element is composed of real estate investment trusts and quoted property companies whose total value is in excess of €500 billion.
Investors can choose to have up to 100% of their capital protected, while those who are willing to place 20% of their capital at risk can earn 220% of the performance of the Investment Portfolio.
Mark Donnelly, Head of Private Banking at IIB Bank, commented on its relevance in today’s market: ‘The rationale behind the development of Blocks+Stocks is very simple – many investors are now seeking investment opportunities in both property and equity markets whilst also looking to control their downside risk. With this single product offering, we believe we have addressed all of these requirements and that the investment will have an extremely broad appeal for both first time and more experienced investors.’
‘Furthermore, investors can also tailor the product to meet their own risk and return requirements. Indeed, for those investors who are willing to forego 20% of their capital, they will benefit from 220% - that is more than two times – of any increase in the chosen property and equity markets.’
The Property and Equity Portfolios are internationally focused with each consisting of three equally weighted indices representing Europe, the United States and Japan. See table below
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PROPERTY PORTFOLIO |
EQUITY PORTFOLIO |
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Europe |
FTSE EPRA Europe
- composed of 102 quoted companies, spread across 13 different countries. The index represents a market value in excess of €180 billion.
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Dow Jones STOXX 50
- a composition of the leading 50 blue chip companies across Europe |
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USA |
Dow Jones US Real Estate
- an index of 91 quoted real estate investment trusts and property holding companies. It represents a current market value of €300 billion.
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S & P 500
- widely regarded as the best single gauge of the U.S. stock market, this index is made up of 500 leading companies. |
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Japan
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Tokyo Stock Exchange REIT
- valued at more than €35 billion, this index currently comprises 39 REITs listed on the Tokyo Stock Exchange. |
Nikkei 225
- an index of 225 Japanese companies listed on the Tokyo Stock Exchange. |
The Investment Portfolio is composed of an equal weighting of the Property and Equity Portfolios. Investors who choose 100% capital protection will receive 110% of any increase in the Investment Portfolio over the 6-year term. Investors who choose 80% capital protection will receive 220% of any increase in the Investment Portfolio. It is possible that the investment will redeem after 3 years if the performance of the Investment Portfolio is equal to or greater than 30% on the third anniversary of the Bond.
