Aviva's Irish subsidiary Hibernian Life and Pensions has launched its Secure Capital Fund into the investment market, the first new product available to both broker and bank customers following the signing of Hibernian's joint venture deal with Allied Irish Banks Group in January 2006.
According to Hibernian, the Secure Capital Fund has been designed to provide returns linked to stock market performance, while simultaneously reducing the risk to customers of a traditional stock market investment. It has stated that the new product has several advantages over those currently available on the market, including an annual management fee of 1.65% per year.
The new product offers stock market investment linked to Hibernian’s High Yield Fund and Aviva’s European Property Fund; the ‘equity basket’. At the outset, all sums invested will have a 60% exposure to the equity basket and 40% to fixed interest securities.
Over time, the exposure to each asset will vary depending on the performance of the funds, though the total exposure to the equity basket is guaranteed not to go below 25% of the total investment, which according to Hibernian means that even if stock market performance is poor during the term, the fund still retains the ability to benefit from a market recovery.
The product also involves the in-built protection of a capital guarantee at the sixth anniversary of the investment being made. Hibernian has said that value on this date will be the greater of; 100% of the full investment value of the units attaching, 80% of the value of the units attaching – based on the highest ever month end unit price achieved at any time during the six year period, or 100% of the amount invested at the outset, assuming no withdrawals have been made.
Gareth McQuillan, marketing and product development director of Hibernian Life and Pensions, commented: What will be of particular interest to the more cautious investor is that at the sixth anniversary they can be sure that their investment will be worth at least the full amount of money invested at the outset.
Hibernian has said that while the Secure Capital Fund is best suited for those investing for six years or longer, there is the option for early encashment, although there is no guarantee of what the investment will be worth at this time.