The Metlife investment bond is open to investors with at least £20,000 and provides access to a secure capital option through a range of four secure capital portfolios. The other fund links comprise managed portfolios and best of breed funds from external fund management groups such as Fidelity, Jupiter and New Star. The fund range was constructed with the help of Morningstar Association Europe and will be constantly monitored.
The secure capital portfolios ensure investors receive back at least the amount they invested, less any withdrawals, on the 10th anniversary. There is also a chance to lock in any gains during reviews, which take place after five years and seven and a half years. On the 10th anniversary the money will be switched into a cash fund which can be reinvested.
The four capital secure portfolios are based on the managed portfolios but have extra costs to pay for the additional security.
Metlife has identified a demand for flexible investment products and says it established this bond to meet this demand. Research conducted for the company by George Street Research supports this as it found that 57 per cent of IFAs feel demand for flexible retirement income products has increased.
The guaranteed secure return option is a distinguishing feature of this bond and this feature is likely to attract people who are looking for extra security. However, the limitation is that it applies only to the amount invested in the secured return portfolios, not the product as a whole.