Old Mutual Int’l launches ‘new breed’ of offshore bond

Old Mutual International has pulled the wraps off a new offshore bond it is calling the Select Bond, which it says seeks to target a “new, wider audience” for offshore bonds with its “simple, transparent charging model and lower premiums”.

OMI, an arm of Old Mutual Wealth, said the Select Bond would “help to break down”a widespread perception of offshore bonds as a type of investment solution intended for customers with either complex investment requirements or who are intending to move overseas, and who are therefore in need of  “a solution which is portable”.

The Select Bond, it said, would invite greater use by focussing on three differentiating improvements on the standard model: Simplicity, control and efficiency, and accessibility; yet at the same time, it will enable investors to access the same fund range as Old Mutual Wealth’s onshore products.

The Simplicity, OMI said, will come from having just one “simple, transparent and competitive charge with no initial, dealing or transaction charges”; the control and efficiency are achieved by enhancing the bond’s portfolio management capability by making use of Old Mutual International’s Wealth Interactive platform; and the greater accessibility is achieved by making the bond available at for a lower premium than the current market average.

1,300 funds

Among the funds OMI’s Select Bond clients will be able to choose from will be the Old Mutual SelfSelect range, consisting of some 1,300 funds “from across all major asset classes”, and the Old Mutual  WealthSelect range of funds.

“Advisers can use any of these funds to build and manage their own model portfolios, or select from the range of multi-asset solutions available from Old Mutual Global Investors’ Multi-Asset team,” OMI said, in a statement detailing the new Select Bond’s key features.

“There will be no asset dealing charges, [resulting in greater] freedom to advisers and customers to switch investments as they choose, without being restrained by additional costs.”


OMI stressed the timeliness of its new offering, coming, it noted, “at a time when pension allowances are reducing, [and] many investors are looking for new ways to save tax-efficiently”. Offshore bonds have always specialised in making this possible, by enabling individuals to benefit from their “gross roll-up” feature.

Offshore bond investors also may benefit from the ability to take 5% per annum in withdrawals from their bond without incurring an immediate liability to tax.

OMI managing director Peter Kenny said he was “incredibly proud” of the new bond, while Tom Hawkins, head of UK proposition, Old Mutual Wealth, added: “At a time when saving for retirement is heavily on people’s minds, and the amount of tax allowance some people receive has reduced, we are seeing growing demand for alternative solutions which help investors save tax efficiently for their retirement.

“Offshore bonds can help advisers meet this demand, and simple online solutions which provide access to quality investment funds at a competitive price will be attractive.”

Last year, Old Mutual International also unveiled a new bond, called the European Wealth Bond, which it said was aimed at “UK high-net-worth investors”, which it said would give investors access to a wider range of investment options – including direct equities – than is normally possible with more generic offshore bonds.

Old Mutual Wealth is a part of Old Mutual plc, the FTSE 100 insurance giant with roots in South Africa. As reported, it acquired the Singapore-based, expat-focussed AAM Advisory firm last year, and also owns the Intrinsic advisory network in the UK. Other parts of the Old Mutual business include Old Mutual Global Investor, the asset managers, and Quilter Cheviot, the discretionary investment manager.

According to Old Mutual, it has more than 19.4 million customers around the world and at the end of last year had a total of £394.9bn in assets under management.

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