RBSI Launches New Guaranteed-Capital Deposit Instrument

Investors Offshore, London

29 April 2002

Royal Bank of Scotland International (RBSI), based in the Channel Islands and the Isle of Man, is launching a new capital guaranteed deposit account, with interest linked to a basket of five leading funds, giving customers access to a fund of funds style product - with none of the usual associated capital risk.

The Five Star Bond will track the performance of five funds managed by established fund managers. The five funds that RBSI has selected are the Fidelity European Growth Fund, the Julius Baer Japan Leading Stock Fund, the Credit Suisse Equity Fund (Lux) USA Fund, the Merrill Lynch Mercury Offshore Sterling Trust (MOST) UK Fund and the JPMorgan Fleming USD Global Fund.

The account offers customers unlimited growth potential as interest is calculated as 75% of the growth in the basket over a five year period. Each fund has equal weighting in the basket, which has a diversified spread across the major global economies. The Five Star Bond will be available to Sterling and US Dollar investors, with a minimum investment of £5,000 or $10,000.

Director, Retail Banking for RBSI, Peter Shirreffs, commented, "While interest rates remain low, investors are considering alternatives to traditional savings accounts to maximise returns. The Five Star Bond is an excellent product for the cautious investor, as interest is linked to the performance of a mixture of global equity and fixed income funds, combined with complete capital security. Furthermore, the Five Star Bond doesn't levy any of the initial and annual charges and fees associated with direct fund investment."

The offer is available for a strictly limited period, on a first come first served basis, with a closing date of 11 July 2002. The offer will close earlier if fully subscribed. The account is located offshore and all income will be paid gross of tax at maturity.

Money deposited in the Five Star Bond prior to the start date will earn interest at competitive rates, which will be added to the initial deposit. Customers do not have access to funds during the five year period and they are advised not to deposit funds they will need during the term of the account.

RBSI describes the five funds which make up the basket as follows:

• Fidelity Funds European Growth Fund - Launched in 1990, this is a true stock picking fund, which aims to achieve long-term capital growth by investing in an actively managed portfolio of primarily pan-European equities. The fund has been managed since 1997 by Anthony Bolton, who has worked for Fidelity for the past 22 years. The fund has a Standard and Poor's Micropal Quartile ranking over one, three and five years and has a Standard and Poor's five fund stars ranking.
• Julius Baer Japan Leading Stock Fund - This fund is designed for risk aware equity investors with a long-term approach and invests in shares of the largest companies in Japan. The objective of the fund is to beat its reference index, Topix, over the long-term. The Fund has a Standard and Poor's Micropal Quartile ranking over one, three and five years and has a Standard and Poor's four fund stars ranking.
• Credit Suisse Equity Fund (Lux) USA - Managed by Susan Everly, the aim of this fund is to achieve the highest possible capital growth by investing in leading US companies, characterised by high profitability, a sound financial structure and a successful management. The fund has a Standard and Poor's Micropal Quartile ranking over three and five years and has a Standard and Poor's four fund stars ranking.
• Mercury Offshore Sterling Trust (MOST) UK Fund - This fund, run by Merrill Lynch Investment Managers, was launched in 1986 and now has a value of £377.5 million. The fund aims to achieve long-term capital growth by investing primarily in a portfolio of shares of quoted UK companies. The fund has a Standard and Poor's Micropal Quartile ranking over one, three and five years as at March 2002 and has a Standard and Poor's five fund stars ranking.
• JP Morgan Fleming USD Global Fund - Winner of an Offex award for Best Global Fixed Income Product, this fund has returned top quartile performance over the last three and five year periods. It aims to achieve capital appreciation by investing in short, medium and long-term global fixed income securities in all currencies and financial markets. The fund's performance is measured against the Salomon World Government Bond Index hedged to USD. The fund has a Standard and Poor's Micropal Quartile ranking over one, three, five and 10 years and has a Standard and Poor's five fund stars ranking.

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