An easy way to win at FTSE?

Guaranteed stockmarket bonds are sold as an easy way to play the FTSE

Protected bonds are an increasingly popular product for passive investors who want exposure to the stockmarket without the risk of big losses.

The bonds tie up investors' money for a fixed period of time and 'guarantee' to return a certain amount of the FTSE100's growth over that period, often with a 'no loss' promise.

The companies can offer this as they have insured themselves against big falls in the market through the use of sophisticated financial instruments.

Although this may sound like a win-win situation, investors should bear in mind that they will be missing out on dividends paid by the underlying companies.

And even more than most investments, timing is crucial.

If bought at the peak of the market, then punters will find themselves locked into five or more years of stagnation: there is rarely an option to make an early escape.

And of course any product with a guarantee attached is only as good as the company making the guarantee.

Watch Adam's full report.

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VIDEO: Guaranteed Bonds

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