Simply put, Capital Guaranteed investments give investors the opportunity to share the return of the underlying investment instrument or instruments in an environment where the capital of the investor is protected. Such funds generally come with a maturity period of six months and longer.
Why should one consider investing in such products?
Diversification is key to reducing the risk of market volatility in a portfolio. Capital Guaranteed investments offer the opportunity to diversify one’s investments and lock in a regular income for a number of years, generally ranging between one to five years.
The Plans’ name is an indication of what an investor would expect in terms of the guaranteed repayment of the initial contribution and yearly income distributions. Of course, the guarantee is provided subject that the Plan is held to maturity. One should also keep in mind that when investing in a product denominated in a foreign currency, exchange rate movements may affect the final value of the capital and return the investor gets when converting the money back into the home currency.
Tiered interest rates is another characteristic that we sometimes see in a Capital Guaranteed Plan, with the interest rate offered increasing from say the first year to the second one. For instance, the interest rate for the MAPFRE MSV Life p.l.c. Guaranteed Capital & Income Plan GBP 2027, which has a three-year duration is 3.25% for Year 1, 3.75% for the second year and 4.10% for the third year.
Sometimes, Plans have an added benefit. For instance, the recent Guaranteed Capital & Income Plans of MAPFRE MSV Life p.l.c. offer an element of life cover. This means that should the policyholder pass away at the age of 70 or younger during the term, an additional one per cent of the net asset value is paid out as a death benefit. An investor has the option to appoint one or more beneficiaries to receive the death claim proceeds. The appointment of a beneficiary under a life insurance contract does not need to be confirmed in a will, since the appointment of a beneficiary supersedes the provisions of a will if there is any conflict between the two.
Another important benefit is that no initial and exit charges apply. However, charges will apply in case of an early surrender.
Applications for the MAPFRE MSV Life p.l.c. Guaranteed Capital & Income Plan GBP 2027 are open for joint, single Bank customers aged 18 years and over. Entities may also apply. Subscriptions close on Friday, March 15, 2024, or earlier if the offer is fully taken up, as in the case for the MAPFRE MSV Life p.l.c. Guaranteed Capital & Income Plan 2026 III, which was fully taken up on March 7, 2024.
Further information and the full terms and conditions applicable to the products may be obtained by telephone on 2275 1627 or 22753193 (Gozo Investment Centre). One may also visit Bank of Valletta for more information.
This Plan is intended for retail investors who have limited or no capacity to withstand losses and who are seeking an investment offering regular income with capital protection and an investment time horizon that coincides with the maturity date of the Plans.
This limited-time opportunity will close earlier if the offer is fully taken up. The value of the investment may go down as well as up in case of a claim before maturity. If held to maturity, Capital and Income are guaranteed by Bank of Valletta p.l.c., a company authorised and regulated by the Malta Financial Services Authority (MFSA), in terms of a contract entered into between the Bank of Valletta p.l.c. and MAPFRE MSV Life p.l.c. This guarantee is subject to conditions as outlined in the product documentation.
Issued by Bank of Valletta p.l.c.,58, Triq San Zakkarija, il-Belt Valletta VLT1130. Bank of Valletta p.l.c. is an enrolled Tied Insurance Intermediary under the Insurance Distribution Act, Cap. 487 of the Laws of Malta for MAPFRE MSV Life p.l.c. (MMSV). MMSV is authorised under the Insurance Business Act, Cap. 403 of the Laws of Malta. BOV Asset Management is authorised to provide investment management services in Malta. All entities are regulated by the Malta Financial Services Authority. The product is manufactured by MAPFRE MSV Life and is distributed by Bank of Valletta p.l.c. It is the underlying fund that is offered by BOV Asset Management.