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Pru bond revamp gives higher income option

Prudential is introducing an option within its Prudence bond which offers a higher annual bonus for investors seeking a regular income.

The Optimum bonus bond gives investors a higher annual bonus by investing in funds weighted towards fixed-interest securities such as corporate bonds and gilts.

The existing Prudence with-profits bond will be renamed the Optimum Return bond and will focus on growth over the medium to long term by weighting its investments towards equity-based instruments.

The Optimum bonus bond has an annual bonus of 5.75 per cent and terminal bonus of 1 per cent. The Optimum Return bond has an annual bonus of 4.5 per cent and a terminal bonus of 2.75 per cent.

Investors can split their investment between the two funds for both growth and income and switch between them. Current investors will also be able to switch between the funds.

Bond marketing strategy manager Campbell Boyd says: “By introducing the new Optimum bonus bond, we are widening the appeal of this type of investment to a greater number of clients. By operating them side by side, advisers will be able to compare and contrast the two funds directly in order to recommend the option which should best meet the different investment goals of clients over the medium to long term.”

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