Are you willing to take advantage of investing in the stock market, but also like to have an element of potential stability? Then read on - this product might offer what you are looking for. Moreover, for a limited time period, you will also benefit from a favourable special offer.

Why do we invest?

Inflation seems to have become a buzzword lately. Everyone talks about it, but what does it really mean? Inflation refers to the increase in price of goods and services over time. This means, in a year’s time you will be able to buy less goods or services than you are able to buy today with the same amount of money. This is a natural occurrence in an economy and to mitigate against inflation one can choose to invest.

Claire Falzon

When investing, you would expect to get a rate of return which is equal or higher than the rate of inflation. This would ensure that the purchasing value of your money is maintained over time. There are several investments which can be considered. What you choose will mainly depend on your risk appetite. It is also worth acknowledging the risk-reward factor. This means that generally the higher the risk you are willing to take, the higher the reward you might expect over the longer term.

Understanding Investments – Investing in low-risk products

An example of a low-risk investment is a ‘With Profits’ fund. ‘With-Profits’ investments work differently than direct investments in the stock market and unit linked investments. Investors may avoid the ups and downs of market volatility, given that the ‘With Profits’ model retains some of the returns made on investments in the good years, to subsidise bonuses in years when market performance is weaker. In this way returns are smoothened along the years.

The most cautious investors might have a preference for low risk products. Keeping in mind the risk-reward factor, one may argue that given the limited risk in such products the return on investment is expected to be a conservative one.

Understanding Investments – Investing in Unit Linked Investments

In contrast to the above, unit linked investments are exposed to market conditions and the value of your investment will vary according to the performance of the underlying investments.

The underlying funds may be linked to cautious investments such as bonds, or equities which are less cautious but aim for higher growth, or to any asset class combination. Once again, keeping the risk-reward factor in mind, the return will depend on the type of underlying assets chosen.

What does the Investment Bond offer?

The Mapfre MSV Life Investment Bond is a unique hybrid product which combines these two methods of investing to cater for investors’ different needs and preferences.

It is a unit linked single contribution plan, the value of which is linked to a number of underlying investments. There are over fifty funds to choose from, ranging from bonds to equities, funds that invest by geographic location to those which invest by  industry. The choice is in your hands to tailor make your investment according to your preference and risk tolerance. Funds are managed by renowned fund houses like Fidelity, BOV Asset Management, Vilhena, Invesco and Blackrock.

Another available option is the ‘With Profits’ Fund which is managed by Mapfre MSV Life. Up to 50 per cent of your Investment Bond may be invested in the With Profits’ fund to provide an element of stability to your investment. This is arguably the special feature in the Investment Bond. It allows you to take advantage of the markets on part of your investment, while putting your mind at rest on the remaining sum. If you opt to invest in the ‘with profits’, you may also withdraw the regular bonus, if declared.

Mapfre MSV Life have recently added two ESG Funds to the list of available funds. ESG funds invest in companies who have certain standards and behaviour in respect to environmental, social and governance factors.

Renowned fund houses

You may choose up to ten funds within your Investment Bond. This offers a remarkable amount of diversification, which is very important for any portfolio. Such diversification helps to spread the risk on various investments, thus reducing the impact of the performance of any single security. Depending on the choice of investments, the investor can potentially lower volatility in the portfolio and lead to more consistent returns over time.

How it works

You can invest in the Investment Bond by means of a lump sum, starting from as little as €3,000. You may stay invested in the plan for as long as you want since this is a whole of life policy and does not have a maturity date. Nonetheless, you may withdraw your investment or part of it when you want subject to certain terms and conditions. The value of your policy will depend on the value of the underlying investments. Another feature of the product is that entry charges are minimal. On the other hand, there are exit charges which decrease as time passes. Thus, the longer you remain invested, the less exit charges will apply.

In order to keep your investment in line with your objectives and risk appetite over time, you may also switch from one fund to another. The first two switches per year are free of charge. The plan can be topped up with additional funds should you wish to invest further at any point. This policy also allows for the nomination of a beneficiary. This means that in the event that the investor passes away, the value of the investment will go to the nominated beneficiaries straight away. It is recommended that you view the Key Features Document/ Key Information Document for a full understanding of the product features.

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The Investment Bond in GBP and US Dollar

The Investment Bond is also available in a GBP and US Dollar version. When investing in these foreign currencies, the investment will be 100 per cent unit linked since the ‘with profits’ option is available in the Euro version only. This is a good opportunity to make use of foreign currency which has potentially been sitting in your savings account, earning no return for quite some time.

The offer

For a limited time period, when you invest in a new Investment Bond, or top up an existing one by at least €10,000, Mapfre MSV Life will top up your investment by an additional 1 per cent. This offer applies to the unit linked part. This is another positive feature to an already interesting concept. The offer is open up to March 31, 2023, however Mapfre MSV Life reserves the right to withdraw the offer earlier. Terms and conditions apply and are available on www.bov.com.

In conclusion

The Investment Bond offers you the opportunity to participate in the market, the flexibility to switch your investment and withdraw when you need, and the comfort of investing with renowned fund houses. We invite you to contact us on bancassurance@bov.com or 2275 1627 to set an appointment or ask for a copy of the key features document and the key information document.

Claire Falzon, Manager Business Generation and Support at BOV Wealth Management Unit

This is a limited time offer ending 31 March 2023. MAPFRE MSV Life reserves the right to close this offer earlier. The Product is manufactured by MAPFRE MSV Life p.l.c. and distributed by Bank of Valletta p.l.c.

Investment decision should be based on the full details contained in the relative Key Features Document and Key Information Document available from our website www.bov.com and this article shall not be construed as a personal recommendation to buy this product.

 The value of your investment, as well as any income you may get from the investment, may go down as well as up. What you might get back will depend on the investment performance and the bonuses we might add. The rate of future bonuses is not guaranteed and may change over the years. By investing into this product you may lose part or all of the amount invested. When investing in a currency which is different from your base currency, the value of the Investment Bond may be affected by changes in currency exchange rates. Withdrawals from your Plan may be subject to fees and/or tax.

Issued by Bank of Valletta p.l.c., 58, Triq San Żakkarija, Il-Belt Valletta VLT 1130. 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. Both entities are regulated by the Malta Financial Services Authority.