BASSET & GOLD is launching a new four-year bond backed by marketplace lending deals, with regular reinvestment of the interest stream set to deliver higher yields.
The new debt offering from the direct lending and alternative finance specialist will return a compounding fixed yield of 30.9 per cent at the end of the term, equivalent to an annual return of 7.72 per cent.
To achieve the high interest rate, the product differs from the firm’s five-year bond, which delivers monthly interest without reinvesting into underlying or newly-launched deals.
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“Our investment team has identified opportunities to underpin this attractive return,” said the firm’s head of relationship management Daniel Smith.
“Our experience to date tells us how tired many investors are of the uncertainty of being offered returns ‘up to’ a given figure, with fees on top regardless of whether that figure is reached.”
The marketplace – or peer-to-peer – lending sector is growing at a rapid pace and is expected to hit $290bn (£225bn) by 2020.
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“All Basset & Gold products are designed to allow individual investors in the UK to take advantage of the growth in marketplace lending, with diversified investments across a wide portfolio mix,” the firm added.
“We are able to deploy customer funds as soon as they are received, so investors’ money is working hard from day one, rather than sitting idle, waiting for an investment team to find a way to deploy it.”
The firm launched an Innovative Finance ISA in March, offering fixed interest rates.