Bonds provide flexible tax-effective option: Centuria
Centuria Life Limited launches three new investment bond funds as flexible, tax-effective medium to long-term investment options.
The new funds have been developed in response to demand from advisers looking to offer clients a larger and more flexible range of investment bond funds, Centuria general manager, Neil Rogan said.
"Investors seeking medium to long-term investment options outside of super have gravitated towards investment bonds, because they are so tax-effective, yet flexible," he said. "Investors can make additional contributions to their investment each year, and if they hold the bond for 10 years or more, they pay no personal income tax on their investment returns.
"At the same time, if for some reason they need to withdraw their investment before 10 years, they can, which gives great peace of mind.
"Advisers are telling us that clients are interested in the investment bond structure for a number of reasons. High net worth clients may have reached their superannuation cap and want other tax-effective investment options, but equally, parents or grandparents saving for a child's education can also see the benefits."
The new investment bond funds take Centuria's offering to seven, with each of the newly created funds employing different investment strategies:
- Cash Plus Bond is a low risk, low fee fund which invests in Australian and international fixed interest portfolios with the aim of providing a return of 0.5 per cent above the cash rate.
- Property Bond is a medium risk, low fee fund which invests primarily in Australian and international property, both directly and through listed entities.
- Imputation Bond is a higher risk, low fee fund, which invests primarily in Australian shares, in particular those which pay franked dividends. The aim is to achieve an internal tax rate comparable with an investment in superannuation.
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