Inora Life is introducing the second version of its dynamic income fund.
Dynamic income 2 is an offshore insurance bond registered and managed in Dublin. Inora Life is hoping the fund will appeal to two types of investor; members of the British expatriate community and UK investors. Both types will be looking for a medium-risk investment that provides income or growth.
Clients can choose to take either 10.75 per cent income or 33.75 per cent growth over the three-year term. The fund also has an option allowing the investor to take payment in euros.
The fund itself will invest in 25 companies listed on the Dow Jones global titans index. This is an index of the 50 largest companies in the world, regardless of sector. Some of the companies the fund will invest will include Disney, General Motors, Toyota, Microsoft, Wal-Mart, Proctor & Gamble and BP.
Inora Life will guarantee that the original capital will be returned as long as the stocks do not fall by more than 30 per cent during the final year of the product. If the stocks do fall by more than 30 per cent, then the original capital will be reduced by 1 per cent for every 1 per cent fall in the value of the stock.
The Inora Life dynamic income fund 2 is similar in structure to the Scottish Mutual income bond, which also only sees a fall in the original capital if the stocks fall by more than 30 per cent in the third year. However, the Scottish Mutual product is slightly more flexible as it offers a monthly income option as well as annual and growth option.
The Dow Jones global titans index, over a three-year period, has not had a very spectacular time. It rose from 221.29 points on September 3, 1998 to 234.08 per cent on September 3, 2001.