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Key benefits and risks

There are a number of key benefits and risks associated with the Aviva Investors Defined Returns Fund 6. Before investing in the Fund, please make sure you have read each one.

 

Key benefits

 
Defined Return
You have the opportunity for a better return than current deposit account rates without investing directly in the stockmarket.
Protection barrier At maturity, the Fund aims to return your initial investment even if the final index level has fallen by up to 50% of the initial index level.
Reducing risk further

Aviva Investors has taken two additional steps to try to minimise the risk to your investment.

  • We’ve chosen a panel of three counterparties that all currently have a strong capacity to pay out the investment return.
  • We have an independent depositary who will hold government bonds as collateral (security). If a counterparty is unable to pay the investment return, the bonds will be sold and the proceeds paid back into the Fund.

 

Key risks

 
Risk of breaching the protection barrier at maturity
Investment in the Fund does not provide a guaranteed return of capital. If the final index level is below 50% of the initial index level, then you will lose more than 50% of your initial investment.
Lower growth than the FTSE® 100 Index You might get back less than if you invested directly in the shares that make up the FTSE® 100 Index.
Early redemption

If you cash in your investment early, there is a likelihood you will get back less than your initial investment.
Counterparty default Should the counterparty providing the derivative be unable to pay the investment return, the Fund may suffer a loss. Collateral in the form of government bonds is set aside to minimise this risk and reduce the loss which may occur. The Financial Services Compensation Scheme (FSCS) does not cover counterparty failure.

 

How to invest


For more information
on how to invest

click here

 

 

        WA03205 08/2010