Catalan savings bank Caixa Terrassa has announced a return of 17.10% per annum for investors in Capital Seguretat 1 Fund, which matured last month. The three-year capital-guaranteed fund, issued in July 2004, had a worst-of payoff linked to a basket of Spanish shares comprising Abertis, Iberdrola, Repsol, Santander and Telefónica.

The good news is particularly useful in the Spanish market in proving that capital-guaranteed funds can deliver. Over the past few months, several of these funds have reached maturity with returns of over 10% AER, countering the bad press that has been given to capital-guaranteed funds locally.

“In the past we have seen capital-guaranteed funds give low returns and in some cases struggle to beat inflation. However, we have also seen funds in this category provide more than interesting returns to investors, which proves there are good and bad products in every category,” said a Spanish structured products specialist. “Capital-guaranteed products have received bad press even from within the structured products arena, but this fund from Caixa Terrassa shows that small providers can also offer interesting products while protecting the investment of their clients,” he concluded.

According to SRP data, more than €4bn worth of capital-guaranteed funds have matured in Spain so far this year, but very few of them have returned above 5% per annum. Of these, Capital Seguretat 1 fund paid out the second highest return (60.57%), following Banco Popular’s Eurovalor Bolsa 100 Fund, which paid 67.51%.

The three-year Capital Seguretat 1 repaid capital at maturity and a coupon of 10% growth plus the performance of the lowest-performing share since the start date, floored at 0. Data published by Spanish regulator CNMV suggests Capital Seguretat 1 Fund achieved sales of €8m.

Capital Seguretat 1 Fund is the only capital-guaranteed fund to have been sold by Caixa Terrassa in the past three years. Caixa Terrassa is currently marketing its monthly structured deposit range: Diposit Inversio (DJEurostoxx50, Ibex35, Nikkei-225), Diposit Estrella 18 (DJEurostoxx50) and Diposit Premium (also linked to a basket of indices -DJEurostoxx50, Ibex35, Nikkei-225), which will be available until the first week of October.

All the above products are available on the Spanish database.