Scottish Mutual has introduced a unit-linked bond that offers access to a range of 38 funds, including a with-profits fund and 23 external funds.
The flexible investment bond allows investors to initially choose up to 10 funds from the range, which they can add to once the bond is taken out. The funds available cover a range of regions and sectors. They include Scottish Mutual's UK equity, technology and ethical funds, plus external funds from the likes of Fidelity, Framlington, Gartmore and Newton.
The bond's main appeal is the ability to mix and match investment funds according to investor's requirements and attitudes to risk within a single product. Investors who are cautious and seeking income could construct a portfolio around the with-profits fund. Those who are inclined towards capital growth with a higher degree of risk could gain exposure to the technology fund.
The inclusion of external funds from eight fund management groups is also a plus since one group cannot excel in all areas of the market. However, attempting to be all things to all investors could be confusing for some and those who use the external funds may have to pay higher charges than internal funds.
According to Standard & Poor's, three of the Scottish Mutual funds are second quartile, five are third quartile and two are fourth quartile based on £1,000 invested on a bid-to-bid basis with net income reinvested over three years to January 21, 2002. There is no three-year past performance for Scottish Mutual's corporate bond, with-profits, ethical and technology funds.