Clerical Medical is expanding its offshore business with a unit-linked bond mainly for high-net-worth investors.
The CMI global investors bond provides access to 33 internal funds, including with-profits funds, tracker funds and currency reserve funds. Cautious managed, balanced managed and aggressively managed funds are also available, denominated in sterling, euros and US dollars.
In addition, there are a range of external funds from 170 fund managers including Fidelity, Gartmore and Henderson. The inclusion of these funds enables the bond to meet investors' needs as their objectives, risk profiles or market conditions change.
With a minimum investment of £100,000 and wide investment choice, the bond is likely to appeal to wealthy, sophisticated clients and pension trustees who do not want to be tied to a limited number of funds from one fund manager. In this respect, the bond is closer to a portfolio management service than other offshore unit-linked bonds such as Scottish Mutual's flexible investment bond.
Scottish Mutual's bond provides access to 15 internal funds and 23 external funds from eight fund managers, but it is targeted at the lower end of the market. It's minimum investment is £5,000.
It compares unfavourably with Clerical Medical's investment choice if clients want a wide range of funds rather than a selection of what are regarded by the product provider. However, the bond could face competition from portfolio management service products such as ABN Amro, which simplify investment choice by offering investors a choice of investment strategies rather than individual funds.