Investing for higher interestrealbondadmin
REAL Bondholders received their half-yearly interest payments on time today, coinciding with the Bank of England’s broadest-yet hint that interest rates could rise in the ‘relatively near term’. Mark Carney, BoE Governor, suggested last week that it was time for the bank to ‘ease its foot off the accelerator’. The next opportunity for a change in interest rates is the Bank’s monetary policy committee meeting on 2nd November.
Investors in REAL Income Bonds will start to benefit from higher interest when base rate rises above 0.5% pa (currently 0.25%). Income Bond interest tracks any changes in base rate between 0.5% and 5.0% pa.
REAL’s MD Ian Dowson comments, “Existing investors in our Income Bonds not only receive an attractive 4% per annum but also have upside potential from the base-rate tracking feature. New investors who may be worried about locking-in to other products during a period of rising interest will also draw comfort from a good initial rate, the prospective boost from future base rate changes – and of course the security backing of UK property assets.”.
REAL Capital Bonds provide an attractive fixed-interest alternative, delivering an average 7.29% pa for 5-year money.