| PIPs are designed to give a guaranteed return on an investment but at the same time an opportunity to benefit from rises in the stock market. The protected return might, for instance, be 4% per year fixed for 5 years, so that even if the products underlying index performs badly, that return is guaranteed. If the index performs better than the minimum return, the investor gets a bonus payment at the end of the period. They appeal to medium-term investors who want to avoid being completely exposed to the gyrations of the stock market.
|
