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Diversified Investment/insurance bonds e.g. Generation Life
Investing Strategy
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!! ☺️
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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
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