Property Bonds- A lower risk alternative

Property bonds have historically provided investors with a rate of return in excess of what one would normally expect from an investment that enjoys low volatility.

The following graph illustrates the returns and volatility of a £25,000 + deposit account, the average Property Bond, Gilt Fund and the UK equity fund life fund average over the past 10 years. This is measured to 31st December 2004 and the raw data is provided by Standard & Poor's Micropal. Basis is £100 invested, offer to offer, all income reinvested and after tax for the basic rate taxpayer. LF denotes Standard & Poor's Life Investment Funds.

Source of raw data: Standard & Poor's Micropal
Risk Warnings:

• Property Bonds do not offer the same level of security as cash.
• The value of units can fall as well as rise.
• Past performance is not a guide to future performance.
• The value of property will be determined by valuer's opinion rather than fact and, in very exceptional circumstances; there may be a delay in cashing in all, or part, of the bond if property is not readily saleable.
• Investors should be aware that in exceptional circumstances Property Bonds may defer the investors withdrawal request for up to six months or more.
• The Financial Services Authority does not regulate deposit accounts.

What is a property bond and who provides them?

We have produced a detailed guide that analyses these bonds and explains what they are, who provides them, and how they are currently invested. In addition, the performance of these funds is covered over different time periods. Charges are identified in a clear manner and investors are often able to benefit from a reduced charging structure through A C Financial when personal advice is not required.