Money growing on trees

By Staff Writer
Nedbank revealed that its Retail and Green Savings Bonds had generated savings of R8 billion in just over two years. 
 
Launched in 2012, the Nedbank Green Savings Bond enables South Africans to contribute towards the creation and development of the green economy, while saving for their future.

 As such, the capital raised from this bond is channeled towards the financing of renewable projects in South Africa – at no cost to the investors.
 
“We are delighted to see the growth in Nedbank Green and Retail Savings Bonds. These recent innovations allow our clients additional savings opportunities, contributing towards increased awareness of the importance of savings.

Getting on top of our individual financial affairs is so important. It is something we are committed to helping our clients with,” said Anton de Wet, managing executive of client engagement at Nedbank.
 
In South Africa, the green bonds universe is still in its infancy and the government has adopted renewable energy as a platform, both to meet its international commitments to reduce greenhouse gas emissions as well as a way of developing a sustainable energy policy. 
 
“The Green Savings Bond presents a hard investment case in that investors now have the opportunity to play a significant role in not only lowering the risk of climate change, but also investing in a sustainable solution. The important message investors need to hear is that backing green investments does not mean compromising on returns,” said Mike Peo, head of infrastructure, energy and telecoms at Nedbank Capital.
 
Can everybody invest in green?
 
An analysis of the profile of the Nedbank Retail and Green Savings Bonds investors revealed that 80% of the book was accounted for by savers older than 40. 
Sasfin financial consultant, Gavin Came, said that this type of investment won’t suit all individuals as you need to diversify your portfolio as far as possible.
 
“A sophisticated or older investor (over 40 years) usually has money and can afford to put a big amount of money in one type of investment.

You need to consider what proportion of your assets would make up a bond like this. To be safe you shouldn’t put more than 5% of your money in one type of investment,” said Came.
 
Nedbanks’s profile also revealed that over 13% of the investors are between the ages of 20 to 39, with 7% under 19. 
 
But Came advises  young people to steer clear of bond investments because the interest rates are low for an age group who should be taking risks on more aggressive investments.
 
Financial planner, Louis van der Merwe, said this type of option would also not be suitable for investors who require access to their capital before the end of the investment term. 
 
“As the returns will be in the form of interest, it would not be suitable for individuals with a high marginal tax rate and investments of more than R500 000 in fixed income instruments (bonds & cash).

This would also not be suitable for investors trying to achieve any capital growth as they will most likely reduce the value of their capital in real terms (after inflation),” he added.

Recent Articles

Featured Do you need credit to survive Easter?

Easter weekend is here and with it the expectation of celebration. While there is nothing wrong with this, it often means spending more money than you bargained for.

 

Read more

Young woman building a legacy brick by brick

When her dad passed away, Siyasanga Ngcongca, an internal auditing graduate, took over the family business. Ngcongca Construction, as her company is known, is a service provider to five insurance companies, handling building and commercial claims.

Read more

Can you evict paying residential tenants?

One of the most common reasons for wanting to evict a tenant is non-payment of rent. But there are many other situations that landlords may encounter. These can range from damaging property and breaching contract, to being reported as a continuous disturbance by neighbours.

Read more

How one entrepreneur designed her financial future

From as early as Cannon remembers, she recalls her grandmother seated behind a sewing machine. Through this influence she was sewing her own aprons and doll dresses by the time she was ten, and by the time she was 16, she started designing and make her own clothes.

Read more

Sign Up

To our weekly newsletter for advice you can bank on

Deals

Hartbeespoort Romantic Weekend Special

Price: R2,999
When: Weekends
Where: North West

Da Vinci Happy Hour

Price: Available on request
When: Weekdays
Where: Cape Town

Glenburn Spa Easter Package

Price: From R1,065
When: 18 -22 April
Where: Muldersdrift