BNP Paribas launched two new capital guaranteed funds for French retail investors, Tie Break 3 and Tie Break 5, according to market reports.
The three-year and five-year versions have their returns linked to the performance of the DJ Eurostoxx 50. The funds will be open for subscription until June 26 in a collective fund wrapper, or until June 19 in a life insurance and other wrappers.
Each month, the latest performance of the Eurostoxx is observed and its actual performance locked in, up to a cap of 1%.
At maturity, which is either three or five years depending upon which version of the fund the investor chooses, the payout is equal to the sum of these fixed performances. The five worst performing monthly figures are removed from the payout calculation to optimize the return.
The five-year version also incorporates an auto-callable feature. The fund will kick out with a 5% return after six months if the performance of the Eurostoxx 50 has been either positive or flat.
Investors are also guaranteed a return of 105% at maturity if the product does not automatically redeem at this time or there is no index growth, which is equivalent to 0.97% a year, minus the relevant fees.