Anyone contemplating a European home for their savings will be spoilt for choice over the next few months as banks, insurance companies and investment houses launch their euro-bonds and eurofunds to investors hungry for a market with real growth potential. Two of the latest offers from Irish investment companies include the Ulster Bank Eurozone Bond and AIB Ark Life's EuroZone Fund, two very different products which will suit quite different kinds of investors. The Ulster Bank bond is interesting in that it tracks the performance of the new Euro Stox 50 Index of leading European companies. It lasts just two years - which a UBIM spokesman described to us as "just the right duration for someone coming out of a fixedterm deposit right now" who doesn't necessarily want a longer term commitment but wants to enjoy the early, upside of the euro.

Uniquely, this tracker, which requires a minimum investment of £5,000 (#6,348.69) is offering double any index return over the two years up to a maximum after-tax return of 18 per cent (the gross equivalent of 23.68 per cent). For example, if the market rises by 6 per cent over the period, you will receive 12 per cent, net. If it rises by say, 11 per cent, you will receive not 22 per cent, but 18 per cent net, the maximum allowable return. On a £10,000 (#12,697.40) initial investment, the maximum 18 per cent net return - would translate into a £1,800 profit and a total return, including capital, of £11,800. Even the downside isn't too bad. If the market falls over the two years, Ulster Bank will cushion the drop by only charging you half the loss: a 6 per cent market drop, for example, means you only lose 3 per cent of your fund. On a £10,000 initial investment this would mean you would get back £9,700. There is no absolute floor on your losses however, (although there would have to be a total meltdown of the markets for you to lose all your money). There are no specific capital guarantees with this bond, but that is also why Ulster Bank can offer such potentially high returns. Typically, internal costs are not transparent, so it is nearly impossible to know just how much it really costs to buy into a bond like this (compared, say, with buying the same stocks directly). Nevertheless, 100 per cent of the investment "is applied to the performance of the bond and there are no charges deducted against your investment" says UBIM. As long as there is some performance growth over the period you will get all your money back, but double the growth performance. To protect your fund against any sudden fall at the end of the term, the index closing average will be based on the average daily closing level of the index during the last month. The Ulster Bank Eurozone bond closes on February 5th.

The AIB Ark Life EuroZone Fund is a unit-linked investment fund concentrating on bluechip stocks in the initial 11 euro zone states. You will need a minimum £5,000 to buy into the bond but there is no bid-offer spread or other initial charges. The annual management fee is 1.5 per cent, however, double the charge associated with products with higher set-up charges. Over the long term, many commentators believe there is little difference between such charges. There are no early encashment penalties either, but a bond like this should be given at least five years to build up sufficient growth or to offset any early market volatility. Finally, two euro funds that deserve an honourable mention, if only because they have led the list of euro funds so far, are Hibernian's EuroEquity Fund with a 21.4 per cent return in the year since it was launched last January and the Continental Equity Fund with a 19.2 per cent return. Hibernian's Euro-Managed Fund, with an 18.8 per cent return has also come in first over the past year in the managed funds category. Investment managers are very bullish about these funds, mainly because of low interest rates and low inflation in the EU, the absence of a currency risk in the 11 euro states and the widening of pension investment in Europe (into a broader market of stocks and out of bonds and into equities).

"Increased competition and the need for scale is driving mergers, acquisitions and privatisations. Companies are responding to the developing equity culture with openness and improved investor relations," says Dara Fitzgerald of Hibernian Investment Managers, which translates into a very positive investment climate for Irish investors.