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IFAs snub Investlife bond

IFAs have criticised Investlife&#39s high-income bond, saying they will not recommend it as returns are linked to the worst performing of eight stockmarket sectors.

Investlife&#39s premier income and growth bond is being marketed as ideal for risk-averse investors as its capital return is linked to eight Dow Jones Europe Stoxx sectors.

But IFAs say this claim is misleading as the bond is only linked to the worst-performing sector of the eight. They say this risk factor is increased as the end value of the bond is determined by whatever level the market stands at on the last day of the bond&#39s life instead of as an average over a period of weeks.

Roberts Clark director Jo Roberts says: “This is not a low-risk product. If the market takes a dive on the last day of the investment term, that will be the end value of the bond. I would not recommend this product unless a client insisted.”

Wentworth Rose market operations director Mark Chandler says: “The risk profile is heightened both by the link to the worst-performing sectors and by the way the end value is determined. This is not something that we will be offering to investors.”

Pinnacle Investments markets the fund and investment director Clive Moore says: “With this product, investors can achieve a high level of income and a reasonable level of security. They have a very good chance of getting their money back.&#39

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