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Participation Bonds

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Participation Bonds - Partbonds

A Participation Bond provides an investor with the certainty of capital preservation, coupled with the consistency on interest.

 "Participation Bond" means a mortgage bond over immovable property

Are you:
  • Recently retired and looking for a secure investment, with high incomes yields with little risk?
  • A first-time investor looking for a simple investment solution with high income yields?

A "partbond" is a collective investment scheme under which investor money is pooled to provide loans to Commercial, Industrial and Retail property owners and/or developers. Investors are paid interest monthly by the Fedbond Fund . First mortgage bonds on the various commercial, industrial and industrial properties within the portfolio are held by the investors as security.

Participation mortgage bonds, normally considered low-risk investments, are governed by the Collective Investment Schemes Control Act, which also governs the unit trust industry. The Act is administered by the Financial Services Board.

Benefits of investing in a participation bond are the following.

  • It is easy to understand – interest bearing investment. Interest received is paid out monthly in advance.
  • You have the option to re-invest the interest received.
  • The compounded effect of interest reinvested will give higher returns.
  • No cost to the investor.
  • Very competitive rate.
  • Capital is always secured.
  • Low risk.

Before you invest make sure:

  • The Partbond Scheme is governed under the Collective Investment Schemes Control Act.
  • The Institution who issues the Participation mortgage bonds is credible – do your homework
FedGroup-Financial-Services

FedGroup Participation Bonds

A Participation Bond provides an Investor with the certainty of capital preservation, coupled with the consistency of interest. Feeding a conservative risk appetite, Participation Bonds are popular with individuals of all ages, Pension Funds, Retirees, Fund Managers, Trusts, Charities and Schools.

Participation Bonds are popular with individuals of all ages, Pension Funds, Retirees, Fund Managers, Trusts, Charities and Schools.

Earn Interest :
The FedBond Fund owns a Portfolio of loans, which earn interest on a monthly basis. Investors are paid a pro-rata share of this by the Fund on a monthly basis.

Investment Options :
Our Participation Bond offering includes two investment options:

  • Our Fixed Option offers a certainty of return regardless of fluctuating Market Conditions.
  • Our Investment Option offers a stable return, which quite simply translates to knowing that you will never invest at the wrong time.

No fees:
Investors are not charged any fees by the FedBond Fund, enabling a 100% capital allocation. The published rate is net of all charges. Please note that Independent Financial Planner fees are negotiable with the Client directly.

Tax benefits:
SARS offers all individuals an interest exemption, in order to encourage savings. Interest earned in the FedBond Fund may be used against this interest exemption, offering tax efficiency. As Investors earn interest income, there is no capital gains tax when investing in a Participation Bond

Regulated:
The FedBond Fund is an FSB registered Collective Investment in Participation Bonds. The low risk associated with investing in a Participation Bond is further minimised through strict regulation by the Collective Investment Schemes Control Act.

Rules:
Participation Bonds are governed by rules that assure its stability and security as an investment vehicle. The FedBond Fund holds a portfolio of first mortgage bonds over South African Commercial, Industrial and Retail property. The Fund may only lend up to 75% of the value of a property to be mortgaged, which ensures capital preservation, as the 25% serves as additional security that can be used as a recovery mechanism if need be. In the event of a default by a Borrower, FedGroup will take steps to recover the outstanding amount. Certainty of capital preservation ensures protection of the initial investment amount.

Expertise:
The FedBond Fund was established in 1991 by John Field. There are currently more than 6 000 Investors who have, over the past 21 years, chosen FedGroup’s Participation Bond offering. Over the years, FedGroup has ensured the monthly interest payment and capital repayment of each of these Investors.

Click to view the Latest Fund Fact Sheet:

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Absa Small Business Provident Fund