As we don’t know your individual circumstances, none of the information in this website is specific to you; therefore Capital Professional Limited can take no responsibility for the decisions you make from it. You must obtain full details of the products and look at your own circumstances, objectives and attitudes to risk before proceeding. If you need advice, please call 0800 2947191.

The TQ Invest website contains information provided by third parties which we believe to be accurate and reliable. Whilst every effort has been made to ensure that all information, including unit prices, fund holdings and portfolio valuations are correct, Capital Professional Limited cannot guarantee this and cannot be held responsible for any loss incurred as a result of their use.

Past performance is not a reliable indication of future returns, the value of units and the income from them, can fall as well as rise and you may get back less than your original investment. The investments featured in the website do not provide guarantees and you could lose all your money. The investments are not readily accessible.

All investments are intended to be held for the long term.

Levels and basis of, and reliefs from taxation can change. Tax reliefs referred to are those currently available and their relevance depends on the individual circumstances of the investor and their tax position. As with all investments, the tax treatment of ISAs is subject to change by HM Revenue and Customs.

Income from investments may fluctuate and part of the capital may be used to pay that income.

In addition to any initial charges quoted there may be a bid/offer spread or dilution levy.

Non investment grade bonds are contained in some funds which carry a risk that the capital value of the fund will be affected because they have an increased risk of default on repayment by the issuing companies compared to investment grade bonds.

Before transferring or liquidating an investment you should ascertain whether any exit penalties or initial charges will apply and consider whether it will be beneficial to you over the period of the investment to proceed. If investments are liquidated you may suffer a loss of income or growth, should the market rise, while the transfer remains pending.

Before switching away from funds that are outside your chosen Platform Provider or Fund Supermarket please be aware that some products have to be sold and re-bought in order to get them onto the platform, which will incur charges/costs. If you subsequently decide to move from one Platform Provider to another or you no longer require the service, some providers do not allow re-registration to another provider. The investments have to be sold and re-bought, which will incur costs/charges. Where transfers and re-registration is possible costs may still be incurred and you should expect the process to take some time to complete.

Some products are not available off-platform and only exist within it. This means it could be necessary to sell the investment and thereby trigger a taxable event if you wanted to leave the Platform Provider or Fund Supermarket.

Exchange rate fluctuations may have an adverse effect on the value of non-UK shares.

The model portfolios are not ‘personal recommendations’ – that is, they might not necessarily be suitable for you and your personal circumstances. Instead, we have designed these so as to provide good prospects of returns for investors looking to commit monies to medium-to-longer term investments. They cater for a range of risk profiles though importantly, even the cautious portfolio can fall in value in the short term. If you are in any doubt as to the suitability of the model portfolio, you should seek the advice of a financial adviser.

SIPPs – If you have, now or in the future, the option of joining an employer’s occupational pension scheme, or a pension to which they will contribute, you should consider joining it or making additional contributions to it first. Before transferring any benefits you should also check that you will not lose any valuable benefits including Guaranteed Annuity Rates, higher tax free cash, higher guaranteed returns or membership rights.

Venture Capital Trusts (VCTs) are higher risk investments and although some VCTs may be viewed as less risky as others, investors should remember that VCTs as a whole are higher risk investments.

As well as investing in shares and other assets, absolute return funds can also use derivatives to take short positions in companies. Therefore the returns depend primarily on the managers stock picking skills, not solely on the price of their holdings rising, and the standard analysis of the underlying investments is not applicable. The use of derivatives can under certain circumstances increase volatility and risk beyond that expected of a fund that only invests in conventional equities.

Corporate Bond Funds

Some important considerations if you have or are planning to invest in corporate bond funds.

What is a corporate bond fund?

Corporate bond funds typically invest at least 80% of their assets in low risk categories of corporate bond securities. These bonds are rated as being relatively low risk by credit rating agencies. Corporate bond funds have attracted large investments by retail investors. This is likely the result of the steady income that these funds can deliver, which is higher than some alternatives, such as deposit accounts.

Most corporate bond funds are largely unaffected by currency movements and experience low impact from company defaults. This means that there is limited risk to capital. However, these funds are not risk free and the risk factors associated with them should be taken into account when deciding if they represent an appropriate investment opportunity.

What are the risks associated with these funds?

Corporate Bond funds are not completely risk free for a number of reasons:

  • If you need to access your money quickly it is possible that, in difficult market conditions, it could be hard to sell holdings in corporate bond funds. This is because there is low trading activity in the markets for many of the bonds held by these funds – and the market for underlying bonds has shrunk in recent years. Fund managers manage this risk for you, by monitoring the values that can be bought and sold in each bond and limiting the size of funds’ holdings in any one bond. Most of the time fund managers ensure that investors are able to buy and sell their units on any day. However, in very extreme market conditions fund managers could become unable to sell sufficient quantities of bond holdings to fulfil redemption orders, leaving investors unable to sell fund units.
  • Interest rate movements have an impact on corporate bond and fund unit prices. So for example, as interest rates rise, bond prices fall. This is the key difference to deposit accounts, where the capital value is constant.
  • Corporate bond funds mainly invest in bonds where the risk of default is low. However, company defaults can impact the level of returns generated by the funds. An unexpected default reduces income and the capital value of a bond holding. Also, market expectations about economic conditions and the likely number of corporate defaults drive bond and fund prices.

What should you consider if you have or want to invest in Corporate Bond Funds?

  • Consider whether the return you expect will deliver to your investment objectives.
  • Make sure that you can financially withstand a fall in the value of your units.
  • Consider whether a likely return close to or greater than your expectations is enough to justify the risk of a negative return.
  • Examine the individual fund characteristics to make sure that the level of risk – and the financial losses these could produce – are acceptable. These characteristics should include whether some of the fund is invested in higher risk instruments, such as high yield bonds or derivatives.
  • Consider whether you need to be able to take your money out quickly.

If you decide that corporate bond funds are suitable it is essential to perform due diligence on individual funds to assess whether their investment strategies meet your requirements. If you are having difficulty understanding corporate bond funds, you should seek professional advice.