Protected Investment Bond
new investment bond for the cautious investor...
Creating and managing an investment portfolio can be a minefield, even for experienced investors. For those looking to capture average long term stock market returns but don't want the extreme ups and downs that can accompany investments in shares, we have created the Protected Investment Bond...
- what is the protected investment bond?
- acts like an investment portfolio
- flexibility that traditional funds can't match
- investment bond with an element of capital protection
- invest between £5,000 and £500,000
- ability to make regular withdrawals
- higher allocation rates the more you invest on day 1
what is the Protected Investment Bond?
The Protected Investment Bond is a single premium investment bond. It aims to deliver steadier, more consistent performance than a purely stock market based investment and has the added peace of mind of an element of capital protection. The bond should be considered a medium to long term investment i.e. 5 to 10 years.
acts like an investment portfolio
The investment bond invests in the engage With Profits Fund, which in turn invests in the Insight Investment Diversified Target Return Fund (DTR Fund). The DTR Fund offers the opportunity to benefit from a global mix of investments in one single fund.
flexibility that traditional funds can't match
The DTR Fund aims to balance risk and return through the ability to constantly adjust the global mix of investments available - including property, commodities, equities, bonds and cash - dependent on market conditions. This means that if, for example, equities are underperforming, a proportion of funds may be switched into property, a class of asset that isn't directly affected by stock market performance.
Even though the Protected Investment Bond aims to produce a return that is as high as long-term average stock market growth, it must be understood this is not always possible. As with any stock market based investment, the value of your investment can fall as well as rise and you may get back less than you invested. Risk cannot entirely be removed and the return potential may not be as great as for traditional stock market based funds that do not offer the same level of risk reduction. Always remember that the value of any of the assets held in the fund, in currency other than sterling, may go down as well as up as a result of exchange rate fluctuations.
More details on the DTR Fund allocation split here.
investment bond with an element of capital protection
On the 5th, 10th and every subsequent 10th anniversary of your investment bond, you're guaranteed at least your original investment (less any withdrawals) if you cash in at that time. If you cash in at any other time you may get back less than you have invested.
invest between £5,000 and £500,000
You can invest between £5,000 and £100,000 per Protected Investment Bond. You can hold more than one but overall your Protected Investment Bonds must not total more than £500,000.
ability to make regular withdrawals
Regular withdrawals may be made monthly, quarterly, half yearly or annually subject
to a minimum of £50 provided it does not take the value of the investment bond
below £1,000.
As long as the total withdrawals in
any one policy year do not exceed 5% there will be no charge. If you decide
to make a withdrawal or regular withdrawals that exceed 5% of the initial
investment amount or to close your policy within the first 5 years there
will be a withdrawal penalty. More
information on withdrawal penalties here.
If you choose to make regular
withdrawals from the outset then it will erode your capital before it has had
the chance to achieve any growth.
Making
any withdrawals will reduce the value of your investment. If the rate of withdrawal
is higher than the rate of growth on your plan this will reduce the value possibly
to below the original investment.
Making
a partial or total withdrawal could result in the loss of some or all of your
higher personal age allowance and may result in a tax liability.
higher allocation rates the more you invest on day 1
The higher the initial investment into a Protected Investment Bond the higher the allocation rate. The allocation rates are as follows:
| Investment Amount per bond | Allocation Rate |
| £50,000 + | 102.5% |
| £25,000 - £49,999.99 | 102% |
| £10,000 - £24,999.99 | 101.5% |
| £5,000 - £9,999.99 | 101% |
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engage Mutual Assurance is a trading name of Homeowners Friendly Society Limited and its wholly owned subsidiary engage Mutual Funds Limited. Both are authorised and regulated by the Financial Services Authority.