What is it?
A managed portfolio of directly held bonds that aims to provide a reasonable and predictable level of income, without taking as much risk as investing directly in equities.
Why Killik & Co?
The Fixed Income Service is constructed and run by Killik & Co’s dedicated Fixed Income team.
Unlike a bond fund, you maintain complete visibility over each and every bond included in your portfolio. Furthermore, you are able to maintain visibility over both the timing and amounts of any coupon or principle repayments.
We have the ability to pay out any income on a smoothed basis directly to your bank account.
Who is it right for?
This Service is designed for those seeking an income in excess of that available from a bank or building society account and who are prepared to take some additional risk in order to achieve this. It may also appeal to those looking to diversify a larger portfolio comprising other asset classes, such as equities.
We would guide clients towards a £50,000 minimum investment.
The Killik & Co Fixed Income Service is designed to provide investors with a reasonable and predictable level of income, without taking as much risk and without the levels of volatility you might expect when investing directly in equities. We do this via a portfolio of carefully selected individual fixed income securities, or bonds.
Unlike investments into a bond fund, the Fixed Income Service is transparent and allows visibility over the individual bonds held in the portfolio. Whilst the exact number of underlying investments will depend on various factors such as the size of your investment, a typical portfolio is likely to contain a minimum of 10 holdings.
Investments within the service may include any type of debt securities, with a particular focus on corporate bonds both on the primary and secondary markets. Fixed Income funds may be used where additional diversification is particularly important, for instance when looking to gain exposure to emerging markets.
Whilst capital gains may be generated from investments, the primary focus of this service is income and therefore investors should not have a requirement for capital growth.
The purchase or sale of bonds within the Fixed Income Service will not usually be subject to stamp duty and the majority of sterling ‘qualifying corporate bonds’ are not subject to capital gains tax. Corporate bonds can be held within an ISA, thereby sheltering the income from tax, and most bonds can also be held within a SIPP wrapper.
Find Out More
Contact us on +44 (0) 20 7337 0777 or send us an email at email@example.com to find out more about our Fixed Income Service or alternatively fill out the form below to download our guide to this service.
Risks to be aware of
As is the nature of investing, there are risks involved when investing in bonds.
There is the risk that the issuer may default and as a consequence you may get back less than you invest or lose your initial investment.
Whilst the generation of a reasonable level of income is the primary objective of this service, no particular level of income can be guaranteed. In certain circumstances it may be necessary for us to increase the overall risk in portfolios, in order to obtain a reasonable level of income.
Bonds are negotiable and consequently prices, as well as yields, can fluctuate from issue until redemption. There are a number of factors could that affect the yields and prices of bonds. For example, the level of inflation, length of time until maturity, issuer’s financial position and movements in interest rates.
For some bonds, secondary market liquidity may be thin, the spread between the selling (bid) and buying (offer) price may be wide and there may be occasions where it is not possible to immediately sell a bond to protect against falling prices.
Unlike a bank or building society deposit, a corporate bond is not covered by the Financial Services Compensation Scheme.