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LV= Launches New ISA Options

Mutual insurance and investment group LV= has launched three new ISA options, offering savers an alternative home for their savings following the record interest rate cuts over the last five months.

Developed by LV= Asset Management (LVAM), the fund management arm of the LV= group, the three new ISA options – the LV= Diversified Income ISA, the LV= Balanced Managed ISA, and the LV= Stockmarket ISA – have been designed to appeal to a range of investors according to their individual needs and the amount of risk they are prepared to take.

All three funds are ‘multi manager' funds which, rather than investing directly into stocks, shares and bonds, give investors ready-made investment portfolios made up of different funds from established investment managers, such as Artemis, Fidelity, Jupiter and MG.

The three funds are designed to appeal to investors with different needs and outlooks, for example whether they are seeking income or capital growth, as well as different attitudes towards risk. LVAM's fund management team constantly monitors the three portfolios to ensure they are performing according to each fund's objectives, making changes to the asset allocation within each fund according to the changing investment outlook.

Returns paid on cash ISAs are currently at the lowest level since records began1, with the average cash ISA rate now at just 1.94%, compared with 5.23% a year ago2. And with the Bank of England's Base Rate at 1%, savers may now want to consider investing in a stock market-related investment to secure potentially higher returns over the long-term.

Tom Caddick, LVAM Head of Multi Manager, said: "Knowing that this tax year's ISA allowance will be gone for good on April 6 puts pressure on investors. While it is impossible to say if markets have passed the rock bottom point yet, I am confident that we will look back at 2009 as a time of great opportunity for those willing to take a long-term view.

"The approach that LV= takes in managing funds – staying properly diversified to spread risk, focusing on fundamentals, and taking a long-term view – is now more than ever the right thing to do, and is good advice for anyone thinking of investing right now."

Savers who invest on a regular basis will also benefit from the effects of ‘pound-cost averaging'. When share prices are low, their monthly investment will buy more shares in their chosen fund, which will benefit them when the share price rises. On the other hand, when prices are higher the monthly premium will buy fewer shares. This helps smooth out the average price paid for shares and lessens the impact of market fluctuations.

All three new ISA options are available from and investors buying online this tax year, before 5 April 2009, will receive a three percent online discount from the initial charge of five percent, paying just two percent. The minimum investment is £100 monthly or a lump sum of £1,000.


The LV= funds in detail

The LV= Diversified Income ISA fund aims to produce an attractive level of income, together with the potential for capital growth over the long-term at lower risk. By investing in a broad range of equity, fixed interest and alternative investment funds, the LV= fund achieves a high level of diversification, to generate income and spread risk.

The LV= Balanced Managed ISA fund is invested in equity and fixed interest funds and is aimed at delivering long-term capital growth for investors who are prepared to accept a greater level of risk than with the LV= Diversified Income ISA fund.

The LV= Stockmarket ISA fund invests heavily in UK and global equity funds, with the aim of generating long-term capital growth, for investors who are prepared to accept a greater level of risk than with the LV= Balanced Managed ISA fund.

The LV= Balanced Managed and LV= Stockmarket Funds have been awarded ‘A' Fund Management Ratings by Standard and Poor's (SP). SP's Fund Management Ratings are designed to help investors find higher quality funds that measure up well against their competitors in different fund management sectors.

Robin Willison, LV= Financial Advice Director, said: We recognise that people have different risk appetites and varying investment needs. For instance, generating an income from their investments may be more important to them than capital growth. Alternatively they may be seeking a combination of the two. That's why each of the LV= ISA funds has been developed by the experts at LV= Asset Management to ensure a high level of diversification and choice for investors.

With cash ISA rates taking a tumble, savers who are prepared to take an element of risk with their capital now need to look at all the alternatives. With the potential benefits of pound-cost averaging, regular contributions into equity ISAs are looking like an increasingly attractive proposition as part of an individual's overall savings strategy, not only for the current tax year's ISA allowance, but also for transfers from previous years.

  1. Bank of England, 2008.
  2. Average cash ISA interest rates as at 11/02/09 and 11/02/08, Moneyfacts 2009.

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    Liverpool Victoria Financial Services Limited, registered in England with registration number 12383237. County Gates, Bournemouth, BH1 2NF, UK