Merrill Lynch Investment Managers is aiming to introduce two new structured products by the end of the year.
Its stepped growth fund and income II fund, which will be listed on the Dublin Stock Exchange, will be the latest in a series of transparent and flexible structured products from MLIM.
The funds will be made up of a number of different share classes and tailored for the risk-averse investor looking to diversify away from traditional equity or fixed-income investments.
Investors can choose investment periods of five or seven years and can take their return as income or capital growth.
As the shares are quoted investments, they can be sold through a stockbroker.
For a minimum investment of £7,000, investors over a seven-year period will receive an annual fixed dividend of 8p on income shares paid in six-monthly instalments on a 100p launch price. Returns on income shares with a five-year life will be 7p.
Growth shares offer a maximum one-off payment at the end of the investment term of 65 per cent over seven years or 40 per cent over five years.
All share classes will pay the maximum return unless the FTSE 100 falls below 40 per cent of its initial level set in mid-December.
Head of UK retail Michael Jones says: "Merrill Lynch stepped growth and income has a clearly defined risk profile, is easy to understand and should be a welcome addition to a typical private client portfolio, especially in current market conditions. This fund is designed for investors who want high returns with a lower amount of risk."
