What different types of investments are there?
Investment types to consider:
Life Insurance Investment Bonds
Commonly called investments bonds, life insurance bonds are life insurance policies where you invest money, typically a lump sum, in a range of financial investments.
Many investment bonds are whole of life investment bonds with no minimum term, although surrender penalties sometimes apply in the early years. Whereas others that are not a whole of life investment bond run for a fixed term. Speak to a Truro adviser to see how they could help you financially.
On death or surrender of the policy or on death (or if not a whole of life bond investment bond a lump sum will be paid out. Financial advice from an adviser will help you understand whether this type of investment suits your needs.
New Individual Savings Accounts (NISAs) or previously known as Individual Savings Accounts (ISAs)
New Individual Savings Accounts (NISAs) or previously known as Individual Savings Accounts (ISAs) are wrappers you can put cash or stocks and shares, depending on the wrapper selected. An adviser based in Truro can explain how a financial stocks and shares wrapper can be put around a wide range of different investment products and can help you save tax.
There are many different types of financial investment that can be held in an ISA, including:
OEICs (Open Ended Investment Companies)
Exchange traded funds
Corporate and government bonds
Individual stocks and shares
As of the 6th April 2016 the new Innovative Finance ISA was introduced which means you will also be able to earn interest tax-free when investing through marketplace lending platforms, peer-to-peer investing.
Investment trusts are similar to unit trusts and Open-Ended Investment Companies (OEICS) in that they let you pool your money with other investors to gain exposure to a range of assets.
How they differ to unit trusts and Open-Ended Investment Companies (OEICS) is:-
They are setup as public limited companies and issue a fixed number of shares and are often referred to as closed ended funds;
They can borrow money to buy shares, otherwise known as gearing. The upside to this is this leverage can produce larger gains in rising markets but vice versa can amplify losses in a downturn;
Shares are traded on the stock exchange;
As a holder who wants to sell, you’ll need to find someone who wants to buy to your shares which is usually done on the stock-market. One final thing, the price of shares of an investment trust can be higher or lower that the actual value of your shares, otherwise known as trading at a premium or a discount;
Which means that the price or value of an investment trust share will depend on the demand for the shares.
A Truro financial adviser can help you find the right investment for your needs.
Unit Trusts and Open-Ended Investment Companies (OEICS)
These are professionally managed funds where managers pool money together from investors and use the funds to purchase bonds, shares, property and cash assets. You can also select funds that only select assets within the UK, Europe or pretty much anywhere in the world. They are both open-ended investments and can create unlimited shares or units, hence the name open-ended. This means that you can buy or sell your shares freely, whilst the fund grows or shrinks. As a result the value of the shares or units you own in a unit trust or OEIC always reflects the value of the assets held by the fund.
Some funds give you the option between income shares or units that make regular payments of interest and dividends the fund receives or accumulation shares or units which automatically reinvest the interest and dividends in the fund.
An adviser from Truro can help you achieve your financial goals.
Pensions and investments are risk-based products. This means that the value of your initial investment and any income generated can fall as well as rise. If you are in any doubt we highly recommend that you seek financial advice when deciding which options are the best for you.
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