Norwich Union launches new with-profit guarantee fund

Article date: 31 January 2005

  • It offers fifth anniversary money-back guarantee

Norwich Union is to introduce a new With-ProfitGuarantee Fund to meet continuing demand from investors andIFAs.

It guarantees to return a customer’s original investmenton the policy’s fifth anniversary regardless of investmentconditions. To qualify for the guarantee, investors must hold theirinvestment in the fund for five years and then move the wholeinvestment out of the fund on or within two weeks after the fifthanniversary.

The new fund will be available from 7 February2005. It replaces the current free fifth anniversary money-backguarantee special offer, which ends on 6 February.

The fund will charge an extra 0.5% p.a. for thefirst five years of investment. It is available through thePortfolio investment bond (See notes to editors). Early exitpenalties might apply if money is withdrawn from the bond beforethe 5th anniversary, and it is not possible to switch ormake additional investments into the fund.

A With Profit Guarantee Fund will also be available on offshorewith-profit investments in the Norwich Union International CoreFunds Bond and Norwich Union International With-profit Bond.

In addition to the fifth anniversary guarantee,an extra 1% allocation will continue to be offered on all newinvestments in Portfolio until further notice. During the offerperiod exit penalties in the first three years will also beincreased by 1%.

Neil Davies, head of investment at Norwich Union, said: "Thefifth anniversary money-back guarantee has proved popular with IFAsand investors because it offers customers peace of mind. Sales havebeen encouraging since the guarantee was offered, and the new fundmeans we are able to continue to offer the guarantee once thespecial offer is withdrawn."

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Rob Pell 01904 452659 Out of hours 07800 699563
James Evans 01904 452791 Out of hours 07800 699525

Notes to editors

  • Norwich Union is the UK’s largest insurer. It is a leadingprovider of life, pensions and investment products and one ofthe leading IFA providers. IFAs provide around 70% of thecompany’s long-term savings business.
  • Norwich Union has strategic alliances with building societiesand other leading UK brand names including Tesco PersonalFinance and The Royal Bank of Scotland Group.
  • Norwich Union’s news releases and a selection of imagesare available from Aviva's internet press centre at www.aviva.com/media.

About the Portfolio fifth anniversary money-backguarantee

  • The fifth anniversary money-back guarantee will be availablethrough a new fund, the With-Profit Guarantee Fund. This fund isidentical to the With-Profit Fund but will charge an extra 0.5%p.a. for the first five years of investment.
  • The fifth anniversary money-back guarantee will apply toinvestments held continuously in the With-Profit Guarantee Fundfor five years that are fully withdrawn on, or within two weeksafter, the 5th anniversary. A penalty will be incurredif money is withdrawn from the fund before the 5thanniversary.
  • The guarantee does not apply to the With-Profit Fund or theWith-Profit Income Fund.
  • If any money is taken out of the fund before the fifth ortenth anniversary through regular withdrawals, one-off withdrawalsor switches into other funds, then the amount guaranteed will bereduced in proportion to the number of units cancelled. Any unitscancelled to meet charges will not reduce the guarantee.

Norwich Union’s Portfolio investmentbond

  • Portfolio is Norwich Union’s investment bond. It offersa flexible way to invest for growth or income. Portfolio’sminimum investment is £5,000 and investors can choose to put theirmoney in a selection of, with-profit, equity, bond, property,distribution, and cash funds.
  • Portfolio also:
    • Offers valuable guarantees - for investments into theWith-Profit Fund, there is a 10th anniversary money-backguarantee. The With-Profit Guarantee Fund offers money-backguarantees on the 5th and 10th policyanniversaries. On the Guaranteed Fund, there is a money-backguarantee on the 5th anniversary
    • Is flexible - offering a wide choice of internal andexternal funds and a choice of two charging structures within asingle bond
    • Offers a wide range of funds –investors have thechoice of income and growth funds. They can choose from a rangeof 31 internal funds and 51 external funds managed by 12industry-renowned fund managers such as Invesco Perpetual,Merrill Lynch, Schroders and Threadneedle. The external fundsinclude three funds of funds managed by IMS Ltd.

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