Demand has revealed that savers are looking for an alternative to placing money into longer term deposit accounts. The Fixed Income Accounts will offer an alternative to deposit accounts which aims to provide a higher income return for a higher level of risk.
The accounts aim to provide this by investing in a range of securitised Bond issues. By following the selection criteria outlined below, we aim to diversify the risk exposure whilst targeting a return on investment that is greater than a standard deposit account.
With a targeted return of 7.74% gross, the accounts look to invest in a minimum of 5 Bonds. The allocation will vary as Bond availability changes but the selection criteria for inclusion will remain consistent.
Each Bond will ideally carry an ARC credit rating. ARC is a recognised rating agency and will provide an indication of overall risk of default for each individual Bond. As such, only Bonds rated BBB+ and higher will be eligible for inclusion.