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Conditions: The fund has been launched within an Oeic and offers investors the opportunity for defined returns of 8 per cent for each year the fund is open.

The return is dependent on the FTSE100 Index being equal to or higher than its closing level on the 7 August 2009, at either one of the anniversaries or at maturity.

The fund has a three-year life, but may mature early on each anniversary.

As long as the FTSE100 Index has not fallen by more than 50 per cent at maturity, investors will also receive their initial investment back.

Aviva Investors aims to mitigate the credit risk in this fund by using collateralisation, an arrangement whereby the counterparty provides collateral to the value of the fund through government bonds that have a minimum AA credit rating.

These are held by an independent depositary and in the event that the counterparty should default, the collateral will become the property of the fund.

The Aviva Investors Defined Returns fund 1 is open to investment until 31 July 2009.

The minimum investment in the fund is £1000 for an Oeic or £500 for an Isa.

Verdict: Alex Pegley, director for Andover-based IFA Calculis Limited, said: "For me an investment the returns of which are related to equities needs to be for a minimum period of five years; as such three years is too short. Eight per cent a year simple returns do not represent good value, if past bull market recoveries are anything to go by.

"That the returns are not terribly exciting results from a combination of factors: low interest rates and low volatility.

"The counterparty risk is very low. Not only is HSBC the counterparty - arguably the strongest bank in the UK - but an anticipated 90 per cent of the investment will be held in government bonds."

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