RBS Green Index Bond

OldJack

I have recently had a three year, fixed term, RBS Green Index
investment mature.
When I took out the investment, at the advice of an RBS advisor, I was told that, although returns could not be guaranteed, the interest rate paid, at the end of the investment period, would be linked to the improvement in the RBS Green Index, and that this had performed well in the past, and should continue to do so.
Throughout the first couple of years, I received regular calls, from the investment advisor, informing me how well the green index was performing, but during the last year I heard nothing. Just before the investment matured, I received a letter, from RBS, telling me that the Green Index had took an unfortunate dip, in the last few months, and that it was unlikely that there would be any return on the investment.
In the event there was, in fact, no return whatsoever on maturity.
Whilst I realise this was a risk I took, from the onset, I do feel that this dip, in an index over which RBS have total control, and over which there now appears to be an element of secrecy, was very convenient for the bank, in that they have had the use of my, and no doubt countless other investors’, money, for three years, at no cost to themselves.
I was wondering how many others, in your circle, were caught up in what is, in my opinion, a legalised scam of potentially enormous proportions.

dunstonh

Throughout the first couple of years, I received regular calls, from the investment advisor, informing me how well the green index was performing, but during the last year I heard nothing.

I very much doubt it was an investment adviser calling you. More likely the branch sales rep.

Whilst I realise this was a risk I took, from the onset, I do feel that this dip, in an index over which RBS have total control, and over which there now appears to be an element of secrecy, was very convenient for the bank, in that they have had the use of my, and no doubt countless other investors’, money, for three years, at no cost to themselves.

RBS has no control over it.

I was wondering how many others, in your circle, were caught up in what is, in my opinion, a legalised scam of potentially enormous proportions.

It may be better for us to understand what you think they have done wrong. Then we can offer comment.

However, you need to be aware that investments will go down as well as up and if you only invest for a short period you are at greater risk of suffering a negative return. There was a stockmarket crash this time last year. It mostly recovered by Christmas but the early part of this year has been poor. So, ending up below index value is not a surprise. No conspiracy theory. No fraud/scam. Just the fact it is maturing in a dip.

Reaper

OldJack wrote: »

When I took out the investment, at the advice of an RBS advisor

Your first mistake -going to a bank advisor for advice.

I do feel that this dip, in an index over which RBS have total control, and over which there now appears to be an element of secrecy, was very convenient for the bank, in that they have had the use of my, and no doubt countless other investors’, money, for three years, at no cost to themselves.
I was wondering how many others, in your circle, were caught up in what is, in my opinion, a legalised scam of potentially enormous proportions.

Considering how volatile the markets have been over the last 3 years and how less interested governments are in green projects when money is short I'm a bit surprised you expected to make a profit. At least you got all your money back.

As for the index although RBS originally designed it the calculation is done by Standard & Poor’s Custom Indices.

grey_gym_sock

investing in a specialized index over 3 years is pretty much a gamble. (actually, that applies to any index over just 3 years.)

since RBS weren't giving you independent advice, i doubt you have any recourse unless they gave you clearly incorrect info when you took out the product.

sabretoothtigger

Was the base value guaranteed.

On the sub prime drama BBC did they showed the sub prime rip off salesman moving into green products as the next choice of easy money

Overall green tech is not a greatly profitable business it seems likely that would reflect in poor returns. Its usually about government subsidy and solar power or whatever competes badly with oil or something more normal

It might be more rewarding to invest in technology, engineering and/or infrastructure. Something like Rolls Royce is involved with turbines, I believe they are often involved with more innovative power production maybe with water, natural gas.
I would call them green because they are working to use power more efficiently

Jegersmart

OldJack wrote: »

in an index over which RBS have total control, .

"The RBS Green Index is a selection of some of the most prominent companies active within green business and covers a variety of sectors including biotechnology, biomass, hydroelectricity, solar and wind energy, energy management services and materials for energy-use reduction."

This statement from a google search means nothing, do you have the specific methodology for the index composition? This is key so that we understand the facts.

J

Reaper

Jegersmart wrote: »

"The RBS Green Index is a selection of some of the most prominent companies active within green business and covers a variety of sectors including biotechnology, biomass, hydroelectricity, solar and wind energy, energy management services and materials for energy-use reduction."

This statement from a google search means nothing, do you have the specific methodology for the index composition? This is key so that we understand the facts.

Here you go. From the 1st result in Google...

Index Construction

The universe of stocks considered for inclusion on the RBOSGRS are all stocks of companies which, RBS believe are active in the green energy industry and:

• with primary or Depository Receipt listings in Australia, Belgium, Denmark, Finland, France, Germany, Italy, Netherlands, Norway, Spain, Sweden, Switzerland, UK, Canada, US, Hong Kong, Japan, Korea or Singapore;
  
• which have at least the equivalent of £150m market capitalisation;
  
• which have a free-float of at least 30% of the full market capitalisation; and
  
• which have rolling a six-month average daily value traded of at least the equivalent of £4m.
  
• The 30 largest stocks by free-float market cap from the universe are then selected for inclusion on the RBOSGRS.

RBOSGRS is subjected to a dynamic de-leveraging factor, linked to volatility.

Rebalancing/reassessment of the RBOSGRS constituents occurs once a year in May.

RBOSGRS uses an equal-weighted methodology. This means that the performance of each constituent component contributes equally to the performance of the Index.

The Index is calculated in GBP.

Dick_Turpin99

Total waste of time, mine returned 6.53% after 3 years when it paid out this year in March.

I tracked mine regularly on the web site, there were times when it hit 20% over and above the investment, but from July last year it dropped from 15/17% down to 5% like a stone and stayed there till divvy-up day....wish I cashed mine in mid-term

dunstonh

but from July last year it dropped from 15/17% down to 5% like a stone

So, actually performing a little bit better than the stockmarket crash which was 20% down at that time.