L&G and Investec join forces to launch Money Builder Fund

Legal & General and Investec have joined forces to create a new cautious managed fund, The Legal & General Money Builder (Investec) Fund.

In an innovative response to advisers' concerns over financial security for investment bond investors, Legal & General and Investec have joined forces to create a new cautious managed fund, The Legal & General Money Builder (Investec) Fund, with an optional no loss capital guarantee on the fifth anniversary.

The fund, available for investment from 3 November 2008, includes a guarantee option, which if selected, guarantees that on the fifth anniversary of their investment in the fund, the value of the investor's capital will not be less than the original capital invested provided they have remained continuously invested in the fund over the 5-year period. The Money Builder (Investec) Fund is exclusively available through the Legal & General Portfolio Bond.

The Legal & General Money Builder (Investec) Fund offers investors the opportunity to benefit from greater potential returns on capital than a typical bank savings account over the medium to long term (five years, ideally longer). It is available through investment in the Bond, both on the Cofunds investment platform and by direct application to Legal & General.

Jamie Vale, Legal & General's Propositions and Sales Development Director, Individual Wealth said, "IFAs have an important role in advising clients on selecting funds for growth and/or income to suit their individual needs and we recognise that financial security is of paramount importance in any recommendation. That is why we've teamed up with Investec to create the Legal & General Money Builder (Investec) Fund.

Our aim is to combine the benefits of an investment bond and a guarantee built on Legal & General's financial strength, to offer an attractive opportunity and the potential to outperform returns from money on deposit while protecting initial capital. With the current uncertainty surrounding traditional savings approaches, savers may be reassured by the knowledge that there is no upper limit to the amount of their initial savings they can invest in the Portfolio Bond and be guaranteed after five years."

Unlike a deposit account, the capital in the Legal & General Money Builder (Investec) Fund is only guaranteed on the fifth anniversary of continuous investment in the fund.

David Aird, Investec Asset Management's Managing Director, UK Distribution, commented:

"Legal & General and Investec Asset Management have joined forces to produce an investment product which directly addresses current investor concerns and provides them with a viable alternative to keeping their money on deposit. By combining our market leading Cautious Managed Fund with our Target Return Bond fund and wrapping this in a Legal & General fund with a guarantee, we have constructed a product which gives investors 100% return of capital after five years invested in the fund coupled with the return of a low/medium risk actively managed equity and bond portfolio. The Cautious Managed Fund and Target Return Fund are focused on capital preservation but do allow investors to access the long term returns of equities and bonds. We are delighted to be working with Legal & General and believe the timing of this launch provides advisers with a perfect opportunity to positively engage with their clients."

The Money Builder fund will be invested 60% in the Investec Cautious Managed Fund, and 40% in the Investec Target Return, with investment in the Cautious Managed Fund permitted to rise to a maximum of 70%. This combination effectively allows investors to tap into three investment strategies - fixed income, equities and absolute return - which, when combined, aim to produce enhanced risk adjusted returns. The Investec Cautious Managed Fund is designed to provide low to medium risk exposure to quality equities and bonds, and focuses on the long-term potential of undervalued stocks. The Fund aims to smooth investment returns through active management and focuses on diversification by asset class, sector and stocks. The Investec Target Return Fund aims to deliver steady gains over the long-term through wide diversification of risk and a high level of investment flexibility. Its aim is to achieve positive returns over the long term regardless of market conditions measured against a cash benchmark.

Jamie added: "Legal & General has maintained the pace of development on Portfolio Bond since its introduction in 2005. We have listened to advisers, who have asked for investment wrappers with more choice and financial security. I believe that this exciting addition of a guaranteed fund, to the already extensive range of funds through the Portfolio Bond, offers a strong and compelling investment proposition to suit the needs of cautious investors, and should reinforce advisers' confidence that investment bonds continue to play an important role in the personal investment sector."