This document provides an overview of bonds as an investment option. It discusses the different types of bonds, including government bonds, corporate bonds, and municipal bonds. It also explains credit ratings and how they assess the risk of default. The document is aimed at educating investors about bonds and when they may be suitable to include in an investment portfolio across different life stages, from those just starting to invest to those in retirement. It promotes including bonds to provide diversification, security, and reliable income.
1. INVESTMENT GUIDE TO BONDS
WWW.AVANTISWEALTH.COM
THE RICHER RETIREMENT SPECIALISTS
2. 2
Contents
SECTION1
OVERVIEW
Introduction to bonds pg 03
How to invest pg 04
Reasons why pg 05
Types of bond pg 06
Credit rating explained pg 08
SECTION2
LIFESTAGES
Your life stages and investing in bonds pg 10
Starting out investing in your 20s and 30s pg 10
Mid-career investing in your 30s and 40s pg 11
Nearing retirement investing in your 50s and 60s pg 12
Retirement investing in your 60s pg 12
SECTION3
INTRODUCINGTHEAVANTISWEALTHBONDCOLLECTION
Avantis Wealth & Bonds pg 14
3. 3
INTRODUCTION TO BONDS
Bonds are essentially an IOU issued by companies and
governments to raise capital. Investors buy this debt
and in return, the issuer promises to pay a set amount
of interest every year, plus repay the capital at a set
date in the future.
Bonds are also known as fixed income and fixed
interest assets, and that’s because they pay out a
fixed amount. There are two main types of bond –
government bonds, also called gilts, and corporate
bonds issued by companies.
Gilts have historically been considered safer than
corporate bonds, as governments are less likely to go
bust and default on their debt. They are issued either
as short- or long-dated bonds; it’s possible to buy a gilt
with a term of up to 50 years.
Corporate bonds are more risky, although generally
considered less so than equities. Although it’s unlikely
a company will default, if it does happen investors
could lose some or all of their money. However,
corporate bond holders are higher up the hierarchy for
a payout than shareholders in that event.
Bonds are graded in terms of credit risk, so investors
have a steer on how risky their investment is. Those
rated AAA to BBB are known as investment-grade
bonds, and are issued by the larger, blue-chip
companies and governments. Those rated BB to C are
called high-yield bonds, as they pay a higher amount of
interest.
Like other traded securities, bond prices can go up
and down. Investors should pay attention to the yield,
which is the interest payable as a percentage of the
bond price. The two have an inverse correlation, so if
the price goes up, the yield goes down.
For example, if a corporate bond has a value of £100
and pays 5 per cent interest for five years, the yield is
5 per cent (£50/£100 x 100). But if the bond’s value falls
to £90, the yield rises to around 5.6 per cent (£50/£90
x 100).
Importantly for the purposes of diversifying your
investment portfolio, bonds typically have little
correlation with the stock market, meaning that
if equities slump, bond values aren’t necessarily
adversely affected.
4. 4
HOW TO INVEST
There are many ways to invest in bonds. Investors can
buy individual corporate bonds through a stockbroker,
a trading platform, or in some instances they are
available direct from the company itself. But buying
individual bonds can be high risk, just like buying
individual shares. If the value of the bond falls or the
company defaults on an interest payment, then your
whole investment will suffer.
Traditionally, buying individual bonds was typically
beyond the reach of most private investors, but in 2011
the London Stock Exchange launched the Order Book
for Retail Bonds, which is a platform where corporate
and government bonds can be traded by private
investors.
Since 2012, a number of companies have issued retail
bonds with low minimum investment requirements, to
target private investors (including ISA investors).
Bonds are traded through an LSE member broker,
in the same way as shares. There are also other
exchanges where bonds are traded.
The traditional method to diversify for first-time
investors is to access bonds through a dedicated bond
fund. Although choosing the right fund manager can in
itself be challenging.
There are many different types of funds, holding
different types of bond investment. Some funds focus
on investment-grade bonds; others on high-yield
bonds, where investors are rewarded for the higher
risk of default with a higher rate of income. Finally,
some funds invest in a combination of both.
5. 5
REASONS WHY
The reason why you may want to include bonds within
your investment strategy is likely to change at different
changes in your life. It’s a common misconception
that bonds are only for very old, very rich, very
conservative investors or very young (savings bonds
for children).
In fact, bonds are an important component of a
strategically-balanced portfolio at every stage of any
investor’s life.
In general bonds offer:
Security
Government bonds offer the investor unparalleled
security. The risk of the UK or other major
governments from developed countries being unable
to repay their debts is low and government bonds
should be considered superior in credit quality to a
bank deposit. High grade multi-national government
agencies (such as the World Bank) also offer an
extremely safe home for the investor holding bonds to
maturity.
Of course, not all bonds are issued by governments.
Many bonds are issued by companies and other
organisations whose ability to service the debt may
be less certain. However, even corporate debt can be
considered a safer investment than the company’s
equity. In the event of bankruptcy, bondholders are
ranked above shareholders in their claim on the
company’s assets.
In general, Avantis Wealth favour asset backed securities
including corporate bonds and loan notes, where you,
along with other investors may collectively have a
legal charge over the underlying asset – usually land or
property, providing a high level of investor security.
Return of capital
Bonds also differ from equities in one other very
important aspect. In order to realise your profit (or
loss) on an equity you are wholly dependent on the
ability to sell the instrument back to the market. When
an investor buys a bond, the redemption date is fixed
in advance, reducing the investor’s reliance on the
uncertainties of future market sentiment or liquidity.
Income
With an ageing population in most developed
countries, income becomes an increasingly valuable
aspect for any portfolio. Income available from bonds
is generally higher than that available from equities.
Also, future income payments are a known quantity,
unlike dividends from equities, which may be reduced
or withheld entirely in times of low profitability.
This makes bonds ideal for investors who wish
to secure future income over a defined period of
time. With bonds paying annually, semi-annually or
sometimes quarterly, a carefully chosen bond portfolio
can produce a reliable monthly income. Remember
also that most bonds pay their coupons gross, without
withholding tax. Investors can take advantage of this
by holding qualifying bonds within an ISA, producing a
tax free income.
Diversification
A well-managed portfolio should contain a variety of
different assets classes. Equities, government bonds,
index-linked bonds, corporate bonds, property and
alternative assets all have their role to play. This simple
approach, also known as “not keeping all your eggs in
one basket” is one of the most effective strategies for
reducing risk in a portfolio.
In certain economic scenarios, such as a recession,
bonds will generally show an inverse correlation in
price movements to equities. Note that in the 2000-
2003 period, when the FTSE100 Index declined by
nearly half from the millennium highs, longer dated
gilts saw prices rise over the same period.
Benefit from falling interest rates
When an investor buys a fixed coupon bond, he or she
locks in interest rates for a defined period. Because of
this, falling interest rates will cause the market value
of the bond to rise. Investors who buy bonds in falling
interest rate scenarios will receive the double benefit of
a secure income and capital appreciation of their asset.
Speculation
Any financial instrument offers the potential to
speculate on future price movements, and bonds are
no exception. Liquid government bonds are often used
by traders speculating on future interest rates while
corporate bonds can see sharp price movements from
changes in the perceived credit quality of the issuer.
6. 6
TYPES OF BOND
Bonds are securities representing the debt of
a government, company or other organisation.
Effectively they are loan stock, or “IOUs” issued by
these organisations and bought by investors such
as banks, insurance companies and fund managers.
Investors are often heard to say “I don’t understand
bonds”, but the truth is that these instruments are
much simpler than equities. The key components can
be broken down as follows:
• The issuer: This is the entity which is borrowing the
money. For instance, £100 million will be borrowed,
and £100 million of securities will be issued. Typically
these will be sold at “par” or 100p in the pound.
• The coupon: The issuer commits to pay a rate
of interest of “X” % per year. This coupon will
generally be a fixed amount and is usually paid
quarterly, six monthly or annually.
• The maturity: A date is set for the repayment
of the money. This is known as the redemption
date. The bonds will be redeemed at “par” or
100p in the pound with some rare exceptions.
At launch, bonds are sold to investors via an
investment bank or broker. This is known as the
primary market. Gilt issues are also offered directly to
the general public. After this primary phase, bonds are
then free to trade between investors and/or market
counterparties. However, unlike equities that trade
through a centralised stock exchange, bonds generally
trade on a peer-to-peer basis from one institution such
as an investment bank to another such as broker.
Gilts or UK Government bonds
These are bonds issued by the UK government in
order to finance public spending. UK Gilts are rated
AAA by all the major credit ratings agencies and can
be viewed as effectively risk-free from the point of
view of default. The price of these instruments will
fluctate from day-to-day in the market, depending on
the outlook for interest rates but investors who buy at
par or below, and hold the bonds to maturity can be
certain that interest and principal will be repaid in full.
Conventional Gilts
The majority of Gilts are of a conventional nature,
paying a fixed coupon (generally twice a year) and
maturing at a set date. The life of these instruments will
vary from a few months out to as much as fifty years.
The most popular Gilts for private investors are
maturities between two and ten years. Some gilts have
more complex features such as “calls”, which enable
the government to retire the debt ahead of time.
Before purchasing a Gilt, it is worth checking the full
details of the issue.
Index-linked Gilts
These instruments were first issued in 1981. Rather
than pay a fixed coupon and amount on redemption
Index-linked gilts differ from conventional gilts in that
the semi-annual coupon payments and the principal
are indexed to the UK Retail Prices Index (RPI).
It is worth noting that there is a time lag on the RPI
used to calculate the coupon and redemption period,
however these instruments do offer a hedge against
inflation. Because of the inflation-linking aspect of
these bonds, Index Linked Gilts may show wider
movement of price over time.
Undated or perpetual Gilts
These instruments differ from conventional Gilts as
they have no set maturity date. They may or may not,
be paid back at a time of the government’s choosing.
Because of this the holder is reliant on the market price
to liquidate his investment, and as such they should be
viewed as more risky than conventional Gilts.
The most well-known amongst this group was the UK
3.5% War Loan. George Osborne decided that the time
was right for the treasury to settle the £1.939 billion
outstanding issue at par in March 2015. The bonds
were originally issued to fund the war effort during
WW1.
PIBS: or Permanent Interest Bearing
Shares
These are a type of instrument issued by UK building
societies. Technically they are not bonds, but a type of
risk capital, being subordinated to deposits and other
senior obligations of the society. The events of 2009
demonstrated that this subordination is a real risk for
investors and holders of PIBS in many building societies
and ex-building societies have been adversely effected.
Due to their fixed coupons, PIBS behave in a manner
similar to bonds and offer investors a long-term
income stream and these securities remain popular
with private investors. Individual issues vary greatly in
coupon, price, yield and other features such as calls.
7. 7
Other types of bonds
Corporate bonds
These are bonds issued by corporations, typically large
quoted companies. However, an increasing number
of expanding small companies are issuing bonds
to finance projects and business expansion as an
alternative to raising loans from a bank.
The life of a company is full of ups and downs and it is
fair to say that in most cases corporate bonds carry a
greater risk than those issued by major governments
or banks. Factors affecting a company’s credit rating
include cash flow, profitability, asset valuations and
unforeseen events such as legal action, a takeover or a
change of the trading environment. The yield on these
bonds will normally be greater than that available on
bank debt.
At Avantis Wealth we focus on a select range of
corporate bonds and loan note securities, including
several that can be held within an ISA. We target fixed
rates of return in the range of 7% to 15%.
Visit www.avantiswealth.com/investments for our
current range of fact sheets. To download them you
will first need to register for our complimentary Gold
membership.
Floating rate notes
These are bonds where the coupon is not fixed, but
based on a reference rate, typically LIBOR. They do
not exhibit the same degree of interest rate sensitivity
as conventional bonds. The majority of FRNs will be
issued with maturities between two and ten years and
will be senior debt.
Convertible bonds
These are bonds where the holder may convert his
redemption proceeds into the equity of the issuing
company. These are known as “equity convertibles”
and can offer a combination of yield and growth for
investors. These instruments may see their price
driven higher by a rise in the company’s equity. Risk,
however, is generally higher. In some cases, bonds may
be issued with the option to convert into other bonds.
These are a rather different kettle of fish and should
not be confused with the “equity convertibles” above.
Subordinated bonds
The majority of bonds issued are “senior debt”,
meaning that the holder has a priority claim on the
company’s assets, ahead of that of the shareholders.
Some bonds are issued with “subordinated” status.
This means that the buyer of the bonds accepts a
lower claim on the company’s assets, below the senior
debt holders, but above the equity holders. Because
of the additional risk, a higher yield will be offered.
These bonds are also more volatile and show greater
sensitivity to shifts in the perceived credit quality of
the issuer.
8. 8
CREDIT RATING EXPLAINED
Credit quality is a measure of the issuer’s ability to
service and repay its debt. In the case of gilts, US
Treasury bonds and other high-quality government
debt, this can be viewed as a certainty. However,
for other issuers, the wise investor must do some
homework.
You may have your own knowledge and views on
a company’s ability to repay debt or, alternatively,
you can view the credit rating assigned to issuers
by several of the credit rating agencies, who deploy
considerable resources to assess both the issuer and
the individual bond.
It is in the interest of bond issuers to obtain these
ratings. Without this stamp of approval from an
independent body, the bonds will be hard to sell.
Indeed, most institutional investors will be unable to
purchase a bond that does not have a rating.
There are two main international credit ratings
agencies, namely Moody’s and Standard & Poors.
Credit ratings are the criteria used by most banks and
fund managers when establishing the suitability of
a bond as an investment but, remember, situations
change quickly, and so can credit ratings.
Here is Standard & Poor’s definition of the ratings it
awards to organisations issuing bonds:
AAA
Extremely strong capacity to meet its financial
commitments. AAA is the highest issuer credit rating
by Standard & Poor’s.
AA
Very strong capacity to meet its financial
commitments. It differs from the highest rated obligors
only in small degrees.
A
Strong capacity to meet its financial commitments, but
is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions
than obligors in higher-rated categories.
BBB
Adequate capacity to meet its financial commitments.
However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened
capacity of the obligor to meet its financial
commitments.
Above BBB
The above credit ratings are known as ‘investment-
grade debt’. As a rule of thumb, investor’s managing
portfolios where the risk must be minimised, and
security of income and capital is paramount, will
restrict themselves to bonds rated AAA and AA, with
perhaps a few single A investments. Consider also
a bond’s credit history. Has the rating improved or
declined over time? Bonds subject to a potential re-
rating will be on ‘credit watch’.
Below BBB
Bonds rated below BBB are known as ‘non-investment
grade’. These bonds are of a more speculative nature,
and imply a certain degree of risk. In view of this, the
incremental yield available on the instrument must
be adequate to compensate the investor for this risk.
Standard & Poor’s gives the following definitions for
non-investment grade debt.
BB
Less vulnerable in the near term than other lower-
rated obligors. However, it faces major ongoing
uncertainties and exposure to adverse business,
financial, or economic conditions that could lead to
the obligor’s inadequate capacity to meet its financial
commitments.
B
More vulnerable than the obligors rated BB, but
the obligor currently has the capacity to meet its
financial commitments. Adverse business, financial,
or economic conditions will likely impair the
obligor’s capacity or willingness to meet its financial
commitments.
CCC
Currently vulnerable, and is dependent upon
favourable business, financial, and economic
conditions to meet its financial commitments.
CC
Currently highly vulnerable.
C
May be used to cover a situation where a bankruptcy
petition has been filed or similar action taken, but
payments on this obligation are being continued. C
ratings will also be assigned to a preferred stock issue
in arrears on dividends or sinking fund payments, but
that is currently paying.
10. 10
YOUR LIFE STAGES AND
INVESTING IN BONDS
• Starting out investing in your 20s and 30s
• Mid-career investing in your 30s and 40s
• Nearing retirement investing in your 50s
and 60s
• Retirement investing in your 60s
Starting out investing in your
20s and 30s
• Investment goal - Maximise capital
• Investment horizon - Very long (30 to 45+ years)
• Risk tolerance - High
At the start of your career you may have a hard time
imagining life 20, 30 or even 40 years from now.
Chances are that you are more concerned about
paying bills and saving money for big-ticket items such
as a car, a wedding, a house or starting a family.
Your ability to reach your goals and achieve financial
security, however, depends in part on maximising your
current income through investments. You have the
opportunity to create the important habits of saving
and strategically investing now so you can enjoy its
benefits in your later years.
The work that you’re doing now is laying a foundation
for future financial freedom. For example, having
money withdrawn from your salary and automatically
deposited into an employer-sponsored pension plan
can provide you with a solid nest egg when you leave
the workforce.
Since you have a longer horizon for investing (the
amount of time between now and when you want/
need to access your money), you are in a better
position to consider investing in higher-yield, higher-
risk instruments. There are higher-risk bonds that
carry high coupons (interest rates). You may be
interested in assuming that risk to potentially make
significant interest on your investment.
Bear in mind, however, that even at this early stage
of the investment game, you want to aim for a well-
blended portfolio to balance risk and market volatility.
While your higher-yield investments can appear
more exciting because of their potential to earn more
interest, it’s important to even out your portfolio with
some strategically chosen lower and medium-risk
investments as well, including bonds.
Depending on your circumstances
bonds can help you:
Grow capital through high-yield returns
There are high-risk / high-yield bonds that may be
of interest to you as you look to grow financially.
Remember that when you invest in higher-risk
instruments you face a greater potential for loss due
to interest rate risk and credit risk. Carefully research
each bond offering and know a bond issue’s terms
and conditions including its’ rating, call features and
whether or not it is insured prior to investing. An
independent financial adviser may be able to help you.
Preserve your savings for a big future
purchase
If you are saving money for a large future purchase;
a car, a wedding, a house then you might consider
investing your savings in a low-risk bond with a
maturity date that matches the date you will need
the money. For example, new UK Government
bonds, more commonly known as Gilts. You can also
buy corporate bonds with maturities timed to your
needs in the secondary market through a bank or a
stockbroker. Prices and yields will vary.
Diversify your employer-sponsored
pension plan
If your employer-sponsored pension plan offers a
variety of collective investment funds, you might want
to allocate some portion of your assets to bond funds
to diversify your holdings and spread your risk. Because
the stock and bond markets do not often move in the
same direction, bond investments can stabilise and
even enhance your overall returns. You might look into
high-yield and long-term bond funds if you want to take
more risk for the possibility of higher returns.
Supplement your income
Maybe you’ve received an inheritance or other large sum
of money. Investing it in bonds can help you preserve
the capital for the future while generating interest
income that you can spend now. Depending on how
much you have to invest, you might want to consider
constructing a bond portfolio yourself with the help of
an independent financial adviser, or investing in another
type of bond investment such as a unit trust bond fund.
Develop discipline with pound-cost
averaging
One of the common myths about investing is that you
have to have a lot of money to do it. That’s a good
reason to consider pound-cost averaging. If you can
only invest a small amount at a time, or if you are
uncomfortable investing large chunks of money at
once, pound-cost averaging can be a way to invest in
bonds automatically on a regular schedule.
11. 11
First, consider working with an independent financial
adviser to determine what types of bond investments
are appropriate for your portfolio. Next, select a
regularly scheduled date to have a pre-determined
amount of money automatically withdrawn from an
account of your choice and have it deposited into
your trading account to purchase the bonds you have
chosen.
Making small deposits over time will add up to
consistent investments which can reap significant
dividends over the long term. Think you don’t have
enough money to invest? Consider the pound-cost
averaging approach to purchase bonds for your
portfolio.
Mid-career investing in your 30s
and 40s
• Investment goal - Capital growth
• Investment horizon - Long (20 to 35+ years)
• Risk tolerance - Moderate
The middle years from mid-30s to late 40s are crucial
to accumulating and wisely investing towards your
retirement and long-term financial goals. Even if you
didn’t, or couldn’t, start saving and investing earlier
you need to begin making up for lost time now.
If you’re between 35 and 45, you are probably earning
enough to live more comfortably now than when you
were younger, but are increasingly concerned about
funding your retirement and paying for your children’s
education. While you still have time in your investment
horizon to be able to recover from a market slump, you
don’t want to have your portfolio so heavily loaded
in high-risk investments that you could lose the bulk
of your money if the stock market or your individual
stocks and shares decline significantly.
Because your investment horizon is somewhat shorter
than when you were first starting out in your early
twenties, you should rebalance your portfolio to make
sure that you have allocated your assets appropriately.
Independent financial advisers usually recommend
that at this point in your investment life it would be
prudent to shift your investments to focus more on
medium-risk and low-risk instruments, while still
maintaining a healthy, but smaller, percentage of
investments in higher-risk instruments.
Remember that the key is spreading, or allocating, your
assets across investments of varying degrees of risk
to blend the risk you’re taking and to maximise your
interest-earning potential. Consult an independent
financial adviser for investment recommendations and
assistance.
Bonds should represent a larger portion of your
asset allocation than they did when you were
younger. Bonds provide a stable backbone and more
predictable income generation than equities. The
following are some bond strategies to consider at this
stage in your investment life. As always, it’s a good
idea to consult an independent financial adviser before
making any investment decisions.
Zero Coupon bonds for specific goals
Zero coupon bonds are sold at a deep discount from
their face value. When the bond matures, the face
value reflects both the principal and the interest
accumulated. Buying a zero coupon now with a
maturity that coincides with the year your child starts
university or the year you would like to retire can be a
cost-effective way to increase the likelihood that you
will have the money you need when you need it.
Increasing your allocation to bonds
If you have not yet started investing a portion of your
assets in bonds, now may be a good time to start.
If you are willing to take a little more risk for the
possibility of higher returns, consider high-yield or
longer-term bonds or corporate bond funds.
12. 12
Nearing retirement investing in your
50s and 60s
• Investment goal - Conserve capital
• Investment horizon - Moderate (5 to 15 years)
• Risk Tolerance - Low
Hopefully by this point the hard work and discipline of
saving and investing is creating a solid portfolio that
enables you to look forward to financial freedom in
your retirement.
As retirement approaches, your investment horizon
shrinks. In other words, the closer you are to
retirement, the less chance you want to take that you
could lose a sizable portion of your investments. You
want to more aggressively protect your assets from
the stock market’s volatility.
Many independent financial advisers suggest that
people at this point begin increasing the bond portion
of their portfolio to 50% or more to lower their overall
investment risk. Some issues to consider when
evaluating bonds for your portfolio:
Bonds or Bond Funds?
The bond markets offer investors many choices and
sectors, each with a slightly different risk and return
profile. As with all investments, diversification is
important in your bond investments too. Because
many kinds of bonds can only be bought in minimum
increments of £1,000, creating a bond portfolio that
includes different issuers, market sectors, maturities and
credit qualities can require a significant amount of assets.
Bond funds, unit trusts or exchange-traded funds may
be a better choice for more convenient and affordable
diversification, although they don’t offer the comfort
of a single bond’s promise that your principal will be
returned on the maturity date.
Managing interest rate risk
The general rule is that when interest rates rise, bond
prices fall and vice versa. If you buy a bond with a 5%
coupon and interest rates on the same maturity rise to
6%, not only will your bond be worth less if you want
to sell it before maturity, but you will also be missing
the opportunity to earn higher interest. One way to
manage this risk is with laddering.
Creating a portfolio of bonds with maturities staggered
over one, three, five and ten years, for example,
helps you do well in any interest rate environment.
When rates are rising, you will have short-term bonds
maturing that allow you to reinvest the principal at
higher rates. When rates are falling, you will still have
the longer-term bonds paying higher coupons.
Retirement investing in your 60s
• Investment goal - Preserve capital
• Investment horizon - Short (immediate access to
funds)
• Risk tolerance - Very low
During retirement your main investment focus
is ensuring your financial security. Most financial
advisers say you’ll need about 70 per cent of your
pre-retirement earnings to comfortably maintain your
pre-retirement standard of living. If you have average
earnings, your State Pension will replace less than half.
Your investments and your employer’s pension plan, if
you have one, will have to make up the rest. Bonds can
generate an important source of retirement income
while preserving your principal.
When thinking about bonds, think
about:
Maximising your lifetime income
The right kind of bond investments for you will depend
on your life expectancy, your tax bracket, and the
amount of risk you can afford to take. High yield and
longer-term bonds may have higher coupons, but they
also can put your principal at risk if you need to sell the
bond before it matures and the issuer’s credit quality
has declined or interest rates have risen.
Guarding against inflation
Retirees living on a fixed income can lose purchasing
power if inflation increases. To help guard against this
risk, you might consider including Index-Linked Gilts
in your investment portfolio. As a result, the amount
of your income that should stay represents equivalent
purchasing power. At maturity, you get the higher
of the original face value or the inflation-adjusted
amount. Another way to guard against inflation is to
keep a small percentage of your portfolio invested in
shares for their greater growth potential.
Leaving a legacy
If you want to preserve your assets so they can be
passed on to your children or to your favourite charity
according to your wishes, you may want to establish
an estate plan using investments held in trusts. Bonds
often play a vital role in the investment strategy for
an estate plan, but you should always to consult your
solicitor and accountant so you understand all the
legal and tax implications.
14. 14
INTRODUCING THE AVANTIS WEALTH BOND COLLECTION
Avantis Wealth has since its inception offered a range
of property backed investments, many of which
are structured like a bond, in the form of a debt
instrument known as a Loan Note (see glossary). These
low-risk investments typically offer fixed returns in the
range of 7 per cent to 15 per cent per annum, offering
significantly higher returns than many traditional unit
trust bond funds.
In July 2015, we launched a select portfolio of bonds in
response to our clients’ need for higher income from
savings held within Individual Savings Accounts (ISA’s).
Avantis Wealth Listed Bond Collection
Current fact sheets can be downloaded on our
website. All bonds subject to availability.
*Listed on the Bermuda stock exchange.
Helix ‘B’ 9.85% Bond* Sector: Consumer Finance
Carduus 6.5% Bond Sector: Social Housing
Blueprint 7.5% Bond Sector: Engineering
Swestate 8.0% Bond Sector: Property Development
15. 15
Next Steps
Thank you for reading this
Special Report. We hope you
have found it interesting
and valuable.
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Contact details
Want to invest for income now?
Do you have poorly performing investments
and need to generate the best possible
income right now? Then consider
investments within our portfolio which offer:
• Up to 15% annual income
• Payable quarterly, six monthly or
annually
• Investment starts at £2,500
Want to build your fund for the
future, achieving maximum
growth?
Whether you wish to invest directly or
through a pension scheme, our investment
portfolio offers a wide choice of investment
type, location and timescale:
• Investments typically from 1 to 5 years
• Returning up to 15% annually, or 60%
over 5 years
• Investment starts at £2,500
Do you have a frozen or
underperforming pension?
Then request a complimentary pension review.
This will show you:
• Value of your fund
• Performance over the last 5-8 years
• Fees and charges you are incurring
• Expected income in retirement
Armed with this information you can explore
options to do better.
If you have any questions or
comments and suggestions
for improvement for the next
edition please email:
marketing@avantiswealth.com
If you have understood and find
resonance with the concepts and ideas
shared in this Special Report, it’s time to
take action. This is what Avantis Wealth,
can offer you:
CALL OR EMAIL US NOW!
CALL OR EMAIL US NOW!
CALL OR EMAIL US NOW!
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DISCLAIMER
Avantis Wealth Ltd is not authorised or regulated by the Financial Conduct Authority (FCA). This is not a financial promotion or an invitation to invest.
Avantis Wealth Ltd does not provide any financial or investment advice. We provide a referral to a regulated advisor who will offer appropriate
advice, or to the company offering an investment who will determine your suitability for the investment prior to any offer being made. We
strongly recommend that you seek appropriate professional advice before entering into any contract. The value of any investments can go
down as well as up and you might not get back what you put in. You may have difficulty selling any investment at a reasonable price and in
some circumstances it might be difficult to sell at any price.
Do not invest unless you have carefully thought about whether you can afford it and whether it is right for you and if necessary consult with a
professional adviser in accordance with the Financial Services and Markets Act 2000. These products are not regulated by the FCA or covered
by the Financial Services Compensation Scheme and you will not have access to the financial ombudsman service.
This document does not constitute an offer to invest but is for information only. Persons expressing an interest in the bond will receive an
invitation document, which they should read and ensure they fully understand prior to making any decision to subscribe. Persons in any doubt
regarding the risks associated with investments of this nature should consult a suitable qualified and authorised advisor.
THE RICHER RETIREMENT SPECIALISTS