The product is dependent on the performance of the FTSE 100 and will preserve investors’ capital as long as the index never falls by more than 50% during its term.
The full term is six years, but the fund has the potential to mature early on its first anniversary and each year thereafter.
It should be noted, however, that early redemption will likely result in a loss of capital.
If an investor held the product for the full term and the closing level of the index did not fall below 50% of the inital level on any given business day then if the final closing level is below its initial level they will receive their capital back, and if the final closing level is higher than the initial level, they would receive their full capital plus 9% per annum yield.
For a £1000 initial investment this would equate to a return of £540.
If, on the other hand, the index did fall 50% lower and then closed lower than the initial value on maturity date, their capital would be eroded in tandem with the index.
So if the index fell 10% there would be a 10% loss of capital.
Another risk is the potential default of one or more of the financial institutions the fund invests in.
The Defined Growth fund 2 invests in derivatives from these institutions, splitting its allocation between six of them.
If one or more of them failed to pay then investors in the fund would suffer a significant loss as this failure is not covered by the Financial Services Compensation Scheme.
Aviva said each of the institutions have an independent credit rating that indicates a strong ability to pay the return, with no more than 20% of the fund investes in any single company.
The six counterparties to the fund are Abbey National Treasury Services, Barclays Bank, HSBC Bank, Morgan Stanley & Co International, RBS and UBS AG.
John Clougherty, chief executive of Aviva Investors UK fund services, said: "We created the Aviva Investors Defined Growth fund 2 based on feedback from UK IFAs, who reported demand for short to medium term investments that are linked to the UK stock market and designed in a way that reduced exposure to counterparty risk."
The fund is eligible for investment within a stocks and shares ISA.
