Aviva Investors launches Defined Growth Fund 3
Aviva Investors has announced the expansion of its structured product range with the launch of the Aviva Investors Defined Growth Fund 3.
Tailored to the needs of UK financial advisers and their clients, the fund is the third in the Defined Growth Fund series and aims to provide an attractive return with less risk than investing directly in the stock market.
The Aviva Investors Defined Growth Fund 3 offers a return of 11 percent per annum (not compounded) and has a six year maximum term, but may mature early on any anniversary. Its performance is based upon the FTSE 100 Index, and it aims to protect investor's capital so long as the index does not fall by more than 50 per cent from its initial level during the product's term.
The Aviva Investors Defined Growth Fund 3 purchases securities and derivatives from six financial institutions in order to generate the investment return. Each of the institutions has been chosen for their strong capacity to meet their financial obligations to the fund, but to further help mitigate risk the product does not invest more than 20 percent with any single institution.
A minimum of £1,000 is required for a direct investment and £500 if within a stocks and shares ISA. The Fund plans to be open to investment for nine weeks, closing on 10 February 2012.
John Clougherty, Chief Executive, Aviva Investors UK Fund Services Limited, commented: "UK interest rates have remained at 0.5% for a record 33 months, and we are not pricing in rate rises until at least 2013. The Aviva Investors Defined Growth Fund 3 aims to provide a way of mitigating this low yield environment, offering financial advisers and their clients the potential for attractive returns plus a defined level of protection from UK stock market falls. In line with the rest of our Defined Growth Fund range, the fund draws upon the credentials of our investment team our robust risk processes to diversify risk.
"Over the course of 2011 the business has maintained a continuous structured product offering, and seen assets under management increase to £292 million across our structured products range. We will continue to launch products in 2012 that address the specific needs of advisers and their clients, offering the potential for yield with a level of protection during periods of market volatility."
The six institutions which act as counterparties to the fund are Abbey National Treasury Services, Barclays Bank, HSBC Bank, Morgan Stanley & Co International, The Royal Bank of Scotland and UBS AG.