The Hartford Bond - anyone heard of it.

[marcp68]

My FA has just spoken to me about it and some of it's features/benefits but I always like to check these things out before I invest so over to the collected masses of the PH collective.....

[gasblaster]

Yep, Hartford is an American insurance company, just starting to develop business in the UK, and they are selling a lump sum investment bond. Know some people who have gone to work there.

[marcp68]

thanks gasblaster, is there guarantee of "no loss" worth a punt??

[jacksdad]

Looks to me like an "Offshore" portfolio Bond. Fairly standard.

Fund manager selection is from Old Broad Street who are very solid in putting together panels. Having said that, the fund list is long only, no absolute or shorts offered, IMHO could be better.

It is expensive also. 85bps for the bond wrapper, >< 100bps for the funds plus 50bps if you choose the safty net. You are looking at an all in charge of some 200-230bps per annum.

You will need to choose a good manager who is going to consistantly return 200bps charge, plus 300 bps inflation risk, i.e. you will need 5% a year just to stand still. Ignore the pre sales documentation, all hypothetical nonsense.

Choose wisely

[gasblaster]

Sorry, I am not familiar with the details of the product. Most 'capital protected' bonds give you a no loss deal if you hang on to the end of the term, with a % of any market rise if markets go up. There are lots of this sort of bond on the market (e.g. Britannia have one with a 15% min return); best bet is to speak to an IFA about them.

[gasblaster]

jacksdad said:

Looks to me like an "Offshore" portfolio Bond. Fairly standard. Fund manager selection is from Old Broad Street who are very solid in putting together panels. Having said that, the fund list is long only, no absolute or shorts offered, IMHO could be better. It is expensive also. 85bps for the bond wrapper, >< 100bps for the funds plus 50bps if you choose the safty net. You are looking at an all in charge of some 200-230bps per annum. You will need to choose a good manager who is going to consistantly return 200bps charge, plus 300 bps inflation risk, i.e. you will need 5% a year just to stand still. Ignore the pre sales documentation, all hypothetical nonsense. Choose wisely

Does sound expensive, however you can probably ignore the 3% inflation in decision-making as this will also apply to any other investment you might make. Lots of portfolio bond providers do the same deal for a smaller cut of your money.

[jacksdad]

gasblaster said:

jacksdad said: Looks to me like an "Offshore" portfolio Bond. Fairly standard. Fund manager selection is from Old Broad Street who are very solid in putting together panels. Having said that, the fund list is long only, no absolute or shorts offered, IMHO could be better. It is expensive also. 85bps for the bond wrapper, >< 100bps for the funds plus 50bps if you choose the safty net. You are looking at an all in charge of some 200-230bps per annum. You will need to choose a good manager who is going to consistantly return 200bps charge, plus 300 bps inflation risk, i.e. you will need 5% a year just to stand still. Ignore the pre sales documentation, all hypothetical nonsense. Choose wisely Does sound expensive, however you can probably ignore the 3% inflation in decision-making as this will also apply to any other investment you might make. Lots of portfolio bond providers do the same deal for a smaller cut of your money.

Agree with sentiment, however, if they are being advised to look at an equity investment, especially long only, then "risk" must be considered. Current notional risk free rate could be aligned to cash. Accesible cash to the majority of private investors would be a long term deposit rate (which has intrinsic charges) and delivers a net return.

So add a decent deposit account to this level of charge and return expectation should be in excess of 6%+. If packages are only designed to deliver 9% then investor must make the decision if the risk is worth 3% per annum.

5 year performance of equities has been poor, with top managers only generating +4% over the indices. Infact 5yrs to end of last year would have seen underperformance of LIBOR of some 20%. Careful consideration required...