View more on these topics

Hot property

Keydata has introduced yet another innovative product. Its new income property bond pays 7 per cent a year or 1.75 per cent quarterly for a fixed term of six years.

It is unusual in that it is based on the rental income from US properties and not on forecast capital appreciation.

There is a minimal downside risk. In fact, I believe it is safer than investing in bonds where the average return over the past five years on corporate bond funds was only 4.9 per cent a year, government bonds 3.7 per cent a year and other fixed interest bonds 5.4 per cent a year (to August 1, 2006).

The US property manager specialising in this niche sector of the market has a 15-year track record and a portfolio of properties worth over $1bn. Even if interest rates rise and the US housing market cools, the apartment rental business, in which this fund invests, becomes stronger as people shift from buying to renting property.

Furthermore, investors are not directly exposed to any borrowing. The risks are minimal, the main one being that the property managers being unable to achieve sufficient occupancy rates but with their experience there should be little risk of this, especially as the investment will be widely spread.

While the investment is for a six-year fixed period, it can be cashed in earlier but then there is some risk to capital although again this is likely to be very small. This is an ideal investment for elderly and conservative investors and also as part of any fixed interest portfolio.

It is available for investment in new Isas and Isa or Pep transfers and for pension investments through Sipps or SSASs, where the income is paid gross. For those investors worried about the future of the stockmarkets, Isas and Pep transfers are an ideal way of achieving high tax-free returns.

Recommended

Fee model is out of this world

I refer to Robert Reid’s article (Money Marketing, August 17). As you expect from Robert. he gave a clear and frank view on the threat that churning and persistency has on our industry. He cleverly compared this with some of the current crop of reality TV shows. At Scottish Life we have let our IFA […]

FSA calls on providers to monitor advisers

The FSA has called for providers to take more responsibility for the quality of distribution and monitor the quality of advice provided by advisers.Speaking at the FSA’s annual Asset Management Conference, chief executive John Tiner said although providers need not necessarily proactively monitor the behaviour of individual distributors they should look to see what aggregate […]

Resolution profits soar

Resolution’s asset management business increased by 150 per cent to £14.5m in the first half of 2006.The company recorded profits of £14.5m in its asset management business compared with £5.8m in the six months to December 31 2005.Overall operating profit rose by 35 per cent to £116m compared with £86m in the last half of […]

Yield of dreams

The method used by charities to show costs could clear up public confusion

US: mid-year review and outlook

By Felix Wintle, Manager of the Neptune US Opportunities Fund H1 2014 Economic data: after last year’s strength, economic data has disappointed. Indeed, the economy contracted 2.9 per cent in the first three months of the year — the US economy’s worst performance for five years. However, rather than a symptom of underlying economic weakness or […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment