Lombard International Assurance has introduced the phased investment programme, an offshore bond that is designed to reassure investors who are concerned about stockmarket volatility.
Economic uncertainty has meant some have been tempted to stay away from the stockmarket and may be losing out at a time when share prices are low.
This bond aims to remedy that problem but only for high-net worth clients as investors must have at least £100,000 to invest. Investors must set up a private client portfolio with Lombard International Assurance before they can invest in the bond.
Once a private client portfolio is established, the capital is invested in the Amvescap Aim cash fund. The interest investors will get from this will be 0.5 per cent below the London InterBank Offered Rate (LIBOR).
The capital is then drip-fed into one or more of Lombard's multi-manager portfolio funds, which invest in bonds and equities, paying in at least £10,000 a month. Investors can stop the phasing process at any time.
The drip feeding is similar to pound cost averaging, where investors make regular contributions instead of a lump sum investment to limit the potential pitfalls of investing at the wrong time.
However, the minimum amount of £10.000 a month is high and could put some investors off this product. The high-net-worth client base it is aiming for is likely to have their own arrangements with stockbrokers and IFAs who could also offer a similar phased investment service and they may not see the point of the Lombard bond.