BondsJul 12 2017

'Smart' bond fund offers energy investment opportunity

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'Smart' bond fund offers energy investment opportunity

Foresight Group has announced the launch of the first tranche of its Foresight Smart Bonds fund. 

The fund gives investors the chance to invest over a period of one, two or three year fixed terms, earning 4.07 per cent, 4.55 per cent or 4.83 per cent respectively if simple interest is paid on maturity. If interest is paid annually, a two year fund would pay 4.44 per cent, while as three year bond would pay 4.59 per cent. 

Trance A, the first of a series of issues, will be available to investors until 15 September 2017. The fund can be opened with a minimum investment of £10,000, and there is no maximum. Investors will be allocated funds on a first come, first served basis. 

Returns are generated from loans given to the companies that own, run and rent installed Smart Meters to UK energy suppliers. Foresight stated the fund has a fundraising target of £10m.  

Bernard Fairman, chairman of Foresight, said: “Foresight has a specialist focus on energy infrastructure and energy efficiency combined with a proud tradition of innovation in creating investment solutions that respond to investors’ needs.  We manage funds for more than 22,000 private investors and for some of the world’s leading financial institutions. 

“Our innovative Foresight Smart Bonds Fund is a good example of providing investors with market leading risk-adjusted returns whilst improving the energy infrastructure across the UK.  We call it investing for a smarter future.”

Digitally-connected smart meters will be installed in all British homes and small business premises by the end of 2020. The £11bn scheme is intended to streamline Britain’s energy system, taking £300m off energy bills in 2020.    

The new smart meters have an in-home digital display that shows exactly how much energy is being used, by value, in near real time. It automatically relays this information back to the energy supplier at predetermined intervals. 

Justin Modray, director at Candid Financial Advice, said: “In general this type of fund is appealing. It offers a consistent, if modest, return and is low risk, being linked with the government’s energy policy.

“However, it would be important to see how expensive it is for investors and how closely linked it is with the government’s policy on the implementation of smart meters. Also, governments have backtracked on energy policies, or at least revised them, so this needs to be considered.”