Back to Exchange
INVESTING STRATEGY

Diversified Investment/insurance bonds e.g. Generation Life

Hi Pearlers, Does anyone have much experience with diversified investment/insurance bonds such as Generation Life’s Vanguard high growth portfolio? I just want to understand the pros and cons associated with investing and through this mechanism rather than say directly through VDHG ETF. I understand that with investment bonds that you only pay a flat 30% tax rate and no capital gains if held for 10 years. I’ve heard something about being able to offset capital losses but don’t quite understand. Also, I’m concerned that the fees negate the potential tax benefits. Any information would be great appreciated!! ☺️

Profile Picture
Kathleen Harvey

18 June 2023

Like
1

3 Comments

Small Profile Photo
Dave Gow - Strong Money Australia

INVESTOR

over 1 year ago

Hi Kathleen :)

Rather than flesh out the pros and cons here, as investment bonds are quite complicated structures, I’ll just link you to a well written article on the topic: https://passiveinvestingaustralia.com/the-tru...

That post also has links to further reading which may help too.

In short, they sound better in theory than they are in reality. The downsides are rarely discussed as they seem to be sold and pushed by a bunch of people with vested interests or who are perhaps unaware of some of the complexities of them.

All the best,
Dave

Like
2
Reply

4000 characters left

Related posts

exchange image
Investing Strategy

What happens if, in 30 years when I have hundreds of thousands or even millions of dollars in shares, nobody wants to buy them?

Hi there! What happens if, in 30 years when I have hundreds of thousands or even millions of dollars in shares, nobody w...

exchange image
Investing Strategy

Best way to invest $10k for long-term growth?

Hey everyone! I’ve recently set aside $10k that I’d like to invest instead of letting it sit in my bank doing nothing. ...

exchange image
Investing Strategy

I've heard that most people would only invest in VDHG if they had to choose one ETF. May I ask why?

Hi everyone, I’m quite new to the platform, and so far I have only invested in VDHG. I've heard that most people would...

Home