HSBC launches Capital Protected Plan & ISA- Issue 8

HSBC has launched a new fund that offers upside exposure to growth in emerging markets, along with the peace of mind of full capital protection.

The HSBC Capital Protected Plan & ISA- Issue 8 - are the first investment products to offer exposure to the HSBC Global Emerging Markets Titans Index. This index includes up to 50 of the biggest companies (by market capitalisation) from the largest emerging market regions, namely China, Russia, Brazil, India, New Europe, South Korea, Mexico, South Africa, Taiwan and Turkey.

At the end of the six-year period, investors will receive a return equivalent to growth in that index. Therefore, if the index is up by 50% over the period, investors will have initial capital returned in full, along with a 50% return. Growth is capped at 70% of the initial investment. Returns are calculated by averaging the index at weekly points in the final year.

A key feature of the new product is the full capital protection, provided the investment is held for a six-year investment period. Therefore, even if the HSBC Global Emerging Markets Titans index falls over that period, capital will still be returned in full.

Steve Conley, HSBC Bank's Head of Investments, said: "Global Emerging Markets have been identified as strong growth areas that offer potentially high investment returns. Although emerging markets have delivered strong growth over the past four years, in recent months returns have been depressed due to uncertainty in the US. Although there could be continued volatility in the short term, we expect that emerging markets will rebound sharply once the US starts to recover. However, any area that offers potentially high returns generally comes with a higher level of risk. By investing in the HSBC Capital Protected Funds, investors can enjoy the best of both worlds: upside benefits from growth in emerging markets, with the comfort that their capital is not at risk."

Importantly, the underlying HSBC Capital Protected Funds are highly tax efficient. As a Stocks and Shares ISA, the Capital Protected ISA accepts subscriptions up to £7,200 (Tax Year 2008/09), with no liability to Income Tax or CGT on returns. It is also possible to transfer existing Cash or Stocks and Shares ISAs into the HSBC Capital Protected ISA.

For a Capital Protected Plan, any realised gain at the end of the period will be taxed as capital gains rather than income, enabling investors to benefit from their annual Capital Gains Tax (CGT) Annual Exemption Amount (£9,600 for individuals in the 2008/2009 tax year).

The offer period for the HSBC Capital Protected Plan & ISA - issue 8 - runs from 14 April 2008 to 20 June 2008. Transfer applications from an existing Cash or Stocks and Shares ISA can be accepted until 2pm on 15 May 2008.

Minimum lump sum investment is £3,000. The maximum investment for a 2008/09 Tax Year Stocks and Shares ISA is £7,200. There is no maximum investment if investing in the HSBC Capital Protected Plan or transferring a previous or current Tax Years ISA held with HSBC or another ISA manager.

The HSBC Capital Protected Funds that link to the HSBC GEM Titans Index are part of a growing family of funds with exposure to various markets, offering capital protection and tax advantages. For example HSBC has recently launched Capital Protected Funds offering exposure to the FTSE 100 index over a six-year period.

For more information customers can call in at any HSBC branch or by calling 0800 520 420 to book an appointment to see a financial planning manager.