Unit linked bonds offer a wide range of choice of funds and they pool the investment in a variety of assets such as equities (shares), corporate bonds, gilts, property and cash deposit funds. These underlying assets which a unit linked investment bond holds are diversified since the risk is spread as the fund managers gain exposure to a collective range of investments. The value of the unit linked investment bond will reflect the value of the underlying assets.
A unit linked investment bond offers you wider investment powers – some bonds give you access to over 40 investment providers and 400 individual funds. So the investment bond can act as an umbrella for a wide range of funds. You can switch funds within your unit linked investment bond, often for no charge. This enables you to spread and adapt your investment so it reflects your investment objectives and attitude to investment risk.
You also have the flexibility and control to alter your investments in line with your investment strategy. For instance if you wanted to invest in a sector which you felt offered good investment prospects or decided to take profits from a sector which you felt had become overvalued, a unit linked investment bond with a wide range of funds can offer you the platform to meet your investment objectives. This gives you the convenience of having all of your investments under one roof- so you can invest in as many funds as you want and create as much diversity within your bond as you require and you will only have one investment to keep track of. Hence investors enjoy convenience of administration and can easily track the performance of their funds since they only have to deal with one investment vehicle, rather than keeping track of a large number of individual policies which can become burdensome.
This ease of administration is further enhanced by the web functionality offered by many of the unit linked investment bond providers. On line valuations and switching make a unit linked investment bond a transparent and effective platform within which you can manage your portfolio. Unit linked investment bonds offer easy access to your funds. Selling all or part of your bond is straightforward, although you do need to be careful triggering “chargeable events”. An exception to this would be investments in property funds, where fund managers can stop outflows from the funds during adverse market conditions.
To view the wide range of unit linked investment bonds available, visit our “Research and Buy” module.