Check out with-profits, too

IT HAS been a good week for shares. Most investors have see the value of portfolios grow as the FTSE-100 index of the UK's top companies rose to record levels.

For investors in both distribution and with-profits bonds, the picture has been the same. Although the overall equity weighting of either bond means that gains are not as substantial as a shares-only fund, they too have shared in the bonanza.

What are the main differences are between distribution and with-profits bonds? Charles Timm, managing director at The With-Profits Shop, says: "There are similarities between the two products. But also several differences. Some distribution bonds will have a higher proportion of their funds invested in index-linked gilts.

"Unlike distribution bonds, with-profits bonds attach a bonus every year which canot be taken away. Depending on your attitude to risk, with-profits bonds will deliver safer returns.

"Distribution bond pay income out of dividends. You may have to accept a lower income at first. Growth in income will hopefully come from growth in the value of the fund overall."

What makes distribution and with-profits bonds attractive is the way investment is spread between different classes of assets. Nervous savers who want some of that upside with less of the risk could do worse than consider one of both forms of investment.

The ISA Shop, a firm of discount brokers, is about to publish a guide to distribution bonds. To reserve your copy, free to Independent readers, call 01777 839205.

The Independent has produced a free 24-page Guide to With-Profits Bonds. Written by Nic Cicutti, the paper's personal finance editor, the guide examines the arguments for and against bonds and where to buy them. For your copy, sponsored by The With-Profits Bond Shop, call 0845 2711007. Or watch out for the coupon on page 4.

Suggested Topics
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Life and Style
ebookNow available in paperback
ebooks
ebookPart of The Independent’s new eBook series The Great Composers
Arts and Entertainment
Under the skin: Sarah Kane in May 1998
theatreThe story behind a new season of Sarah Kane plays
Arts and Entertainment
Preening: Johnny Depp in 'Mortdecai'
filmMortdecai becomes actor's fifth consecutive box office bomb
Sport
Bradford City's reward for their memorable win over Chelsea is a trip to face either Sunderland or Fulham (Getty)
football
News
Lars Andersen took up archery in his mid thirties
video
Voices
Focus E15 Mothers led a protest to highlight the lack of affordable housing in London
voicesLondon’s housing crisis amounts to an abuse of human rights, says Grace Dent
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs General

    Recruitment Genius: Warehouse Operations & Logistics Manager

    £38000 - £42000 per annum: Recruitment Genius: One of the UK's best performing...

    Recruitment Genius: GeoDatabase Specialist - Hazard Modelling

    £35000 - £43000 per annum: Recruitment Genius: Our award-winning client is one...

    Recruitment Genius: Compressed Air Pipework Installation Engineer

    £15000 - £21000 per annum: Recruitment Genius: This leading provider of Atlas ...

    Recruitment Genius: Operations Coordinator - Pallet Network

    £18000 - £20000 per annum: Recruitment Genius: Opportunity to join established...

    Day In a Page

    Woman who was sent to three Nazi death camps describes how she escaped the gas chamber

    Auschwitz liberation 70th anniversary

    Woman sent to three Nazi death camps describes surviving gas chamber
    DSK, Dodo the Pimp, and the Carlton Hotel

    The inside track on France's trial of the year

    Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
    As provocative now as they ever were

    Sarah Kane season

    Why her plays are as provocative now as when they were written
    Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

    Murder of Japanese hostage has grim echoes of another killing

    Japanese mood was against what was seen as irresponsible trips to a vicious war zone
    Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

    Celebrities call on David Cameron to take more Syrian refugees

    One young mother tells of torture by Assad regime
    The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

    The enemy within

    People who hear voices in their heads are being encouraged to talk back
    'In Auschwitz you got used to anything'

    'In Auschwitz you got used to anything'

    Survivors of the Nazi concentration camp remember its horror, 70 years on
    Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

    Autumn/winter menswear 2015

    The uniforms that make up modern life come to the fore
    'I'm gay, and plan to fight military homophobia'

    'I'm gay, and plan to fight military homophobia'

    Army general planning to come out
    Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

    What the six wise men told Tony Blair

    Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
    25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

    25 years of The Independent on Sunday

    The stories, the writers and the changes over the last quarter of a century
    Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

    Homeless Veterans appeal

    As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
    Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

    Smash hit go under the hammer

    It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
    Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

    The geeks who rocked the world

    A new documentary looks back at origins of the computer-games industry
    Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

    Belle & Sebastian is taking a new direction

    Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea