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Sainsbury&#39s builds on Sandler suite

Sainsbury&#39s Bank is building on the Sandler proposals by offering an income Isa that invests in the Halifax Investment Management corporate bond fund, which was established in September 2002.

This Isa has a target yield of 5.75 per cent and has an annual management charge of 1 per cent. The majority of the underlying portfolio will be invested in corporate bonds rated BBB and above, although small amounts will also go into bonds below this.

Corporate bonds, particularly investment-grade bonds, are looking attractive in the current environment of low interest rates, low inflation and volatile equity markets. The underlying fund invests heavily in BBB-rated bonds, which provide a middle path between risk and reward. Investing in bonds with higher ratings would make it difficult to meet the target yield, but focusing on the high-yield market would be too risky for the cautious investor it is aimed at.

Going into BBB rated bonds means the fund can get the right mix between risk and reward. The yield on higher-grade bonds would not be enough to support this fund&#39s target yield, and going below BBB would make the fund too risky.
Investors who are looking for higher income than is available on building society accounts might see this Isa as a tax-efficient alternative, but only if preserving the original capital is not a priority.

However, a recent survey from IFA Hargreaves Lansdown shows that although 45 per cent of investors intend to use their Isa allowance this year, only 16 per cnet of these will be investing new money.

According to Standard & Poor&#39s, the Halifax corporate bond fund is ranked 78 out of 78 funds based on £1,000 invested on a bid-to-bid basis with net income reinvested over three months to March 7, 2003.


NU presses Government on life taxation

Norwich Union is pressing the Government not to abolish the 5 per cent withdrawal rule on life bonds in the forthcoming budget.It says that any restriction on the rule would in isolation reduce the attractiveness of life bonds. Instead, NU is calling for a comprehensive rethink for the tax regime for all savings products and […]

Maisons to be cheerful

I want to build or buy a property in France. What do I need to know? This may prove to be a good time to purchase a property in France asprices compare well with those in the UK. With low European interestrates, money is cheap. You must remember that the house purchaseprocedure is different and […]

Get on route 166

The fears surrounding CP166 are understandable, as inefficientproducts and processes will be revealed to all and the changes to thesystem will force companies to drop products that incur high chargesin favour of those that operate more efficiently. The wait-and-seeattitude, with many organisations holding on to see what theircounterparts will do, could be a significant risk. […]

Big bonuses for Standard Life bosses despite losses

Standard Life is paying directors big bonuses and pensions despitestockmarket losses and pulling out the stops to clear regulatorysolvency hurdles.The mutual is awarding performance-related bonuses to directors.Chief executive Iain Lumsden was paid £743,000 last year. Thisincludes salary of £467,000, £16,000 benefits includingcar, £136,000 performance-related bonus and £124,000 as thecashable part of a long-term incentive. He […]

Tech IPOs: The outlook in 2017

Ali Unwin, CTO & Fund Manager, Neptune 2016 was a weak year for technology IPOs – only 13 US venture-backed tech IPOs hit the market, in spite of fairly high public market valuations and investor appetite. Will 2017 be different, asks Neptune CTO & Fund manager Ali Unwin. Click here for article Important Information Investment risks Neptune […]


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