Scottish Mutual has introduced with-profits.com, a unit-linked bond that allows investments to be split between a with-profits fund and a technology fund.
The technology fund focuses mainly on technology stocks in North America and can include biotechnology, telecommunications and media stocks. The annual bonus rate for the with-profits fund is currently 5.25 per cent. Investors can take regular income and make one-off withdrawals.
The bond aims to produce capital growth and income over the medium to long term. Investors can choose how they want their investment to be split between the two funds. Those who want to take a higher level of risk may decide to invest most of their capital in the technology fund, whereas other investors might prefer to invest equally between the funds. Less adventurous investors could opt for greater exposure to the with-profits fund, with only a small percentage invested in technology.
Technology is highly a volatile sector that tends to attract experienced high-risk investors. On the other hand, with-profits funds are traditionally seen as a halfway house between building society accounts and stockmarket investments. Although the bond's marriage between technology and with-profits is innovative, it could be seen as a mis-match that does not meet the requirements of either type of investor.