Sun Life International has unveiled its international with-profits bond, an offshore single premium bond.
The bond is available in three currency denominations euros, dollars and sterling. It invests in Axa Sun Life's with-profits fund and is designed to provide income, growth or a combination of both over the medium to long-term. It may attract cautious investors, including retired people, who want the tax advantages of an offshore investment without experiencing stockmarket volatility.
Investors receive a regular bonus and a terminal bonus may be paid on surrender or death, although this is not guaranteed. Regular bonus rates depends on the currency chosen. Sterling investments currently receive 6.5 per cent, which includes a special bonus rate of 1.25 per cent. The regular bonus rate for euro and dollar denominated bonds is currently 6 per cent, also including a 1.25 per cent special bonus.
Regular withdrawals of up to 7.5 per cent a year can be made without charge and from the sixth year, an annual loyalty bonus of 0.5 per cent is added to the investment.
This with-profits bond is more transparent than traditional with-profits funds as the bonus rates and 1 per cent annual management charge are clearly explained to the investor. However, offshore products may be more expensive and some investors would go for an onshore with-profits bond instead.