NFU Mutual launches new investment with something for everyone

From 9th July 2007, NFU Mutual is to offer a new investment bond that gives investors the opportunity to benefit from potential growth from a diverse range of assets including equities and commercial property, whilst protecting the value of their original investment on a set date in the future.

The 2007 Limited Edition Bond is a special version of the insurer’s Flexibond investment, which is entirely invested into the with-profits fund. It is only available until 28th September and is aimed at investors looking to the medium to long-term who are attracted by the potential for steady growth but also want some protection from short-term market volatility.

Something for everybody

The thing that makes the 2007 Limited Edition Bond different is that it is available with two options, to appeal to the investor concerned about capital security, as well as the investor looking simply for steady growth potential.

Option 1 – Checkpoint Guarantee

The special Checkpoint Guarantee means that, even if financial markets fall in the interim, on the fifth policy anniversary, the cash-in value of the bond will be equal to at least the amount originally invested.

Option 2 – Enhanced Allocation

Instead of a guarantee, option 2 provides an immediate, tangible, up-front boost in the form of an extra allocation of 1%, rising to 1.5% of the initial investment for lump sums of £50,000 or more.

Ian Leech, General Manager Sales at NFU Mutual commented, “Although financial markets have remained relatively positive and buoyant so far this year, in the past things have not been entirely plain sailing. There have been some significant corrections in world markets over the last few years, and the wobble in February was a sharp reminder that things don’t always go smoothly and that investors continue to be nervous. Our new Limited Edition Bond can be tailored to meet the needs both of investors more concerned with capital security and of those who are more interested in steady growth potential.”

Proven track record

This new launch comes on the back of a number of recently released surveys that continue to highlight the consistent performance of the NFU Mutual with-profits funds.

In December 2006, Money Management highlighted their superior With-Profits Bond performance - where NFU Mutual provided top quartile payouts 80 per cent of the time and consistently achieved above average returns 100 per cent of the time. Over nine and ten years, NFU Mutual was the top company.

The results of the NFU Mutual pensions with-profits investments have also been recognised. In March 2007, as well as awarding NFU Mutual a further 5 star ‘best buy’ award, the Money Management Individual Pensions survey highlighted the strong With-Profits performance from NFU Mutual where it achieved top 5 ranking in 6 out of 8 of the Open Market Option categories measured.

Ian Leech concluded: “I remain convinced that investments linked to a financially strong with-profits fund with a healthy exposure to equities continue to have an important role to play. I believe that investors will be encouraged by some of the more positive results that have been published about with-profits recently.

“In fact, our Investment Team achieved pre-tax growth of 12.5% on our with-profits fund last year and on top of that, we increased our Terminal Bonus rates from 1st July as well. We believe that this strong performance, combined with the excellent credentials of our with-profits fund, represents an excellent platform for this new product.”

Limited Edition Bond key features:

Open to investment from 9th July to 28th September 2007 while funds last

Minimum lump sum investment is £20,000 and the maximum is £1,000,000

The 2007 Limited Edition Bond is available with one of two options:

The Checkpoint Guarantee Option guarantees that on the fifth policy anniversary the cash-in value of the investment will be at least equal to the initial amount invested – even if market conditions have fallen in the meantime. Before and after the fifth anniversary the cash-in value could be less than the amount invested. The investment must be left completely untouched in the period leading up to the fifth anniversary or the guarantee will be forfeited. The guarantee expires and ceases to be of effect after the fifth policy anniversary.

The Enhanced Allocation Option is an alternative to the Checkpoint Guarantee. Investments up to £49,999 will receive an extra 1% allocation. Investments of £50,000 and over will benefit from a 1.5% uplift. If the client opts to switch the investment out of the with-profits fund within the first three years the enhancement will be clawed back.