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Standard Life Distribution Bond
tykejim
Posts: 1 Newbie
I am obviously thick, because I don't understand the SL Distribution Bond I have.
I have recently had a letter saying that in spite of the current financial situation, SL are pleased to be able to maintain their 6-monthly 'distribution' at 2.5%. I don't take income from the Bond, so they have bought extra units with the value of the 'distribution'. But having added the extra units, they then reduce the unit price so as to keep the value of my investment unchanged.
I don't understand this at all. What are they distributing? Why should they be pleased to maintain the level at 2.5% when it doesn't (seem to) cost them anything? I have contacted SL, but they seem to just confirm that my understanding is correct, but surely it can't be? Any help/explanation gratefully received, and sorry if my query just reveals my financial illiteracy!
I have recently had a letter saying that in spite of the current financial situation, SL are pleased to be able to maintain their 6-monthly 'distribution' at 2.5%. I don't take income from the Bond, so they have bought extra units with the value of the 'distribution'. But having added the extra units, they then reduce the unit price so as to keep the value of my investment unchanged.
I don't understand this at all. What are they distributing? Why should they be pleased to maintain the level at 2.5% when it doesn't (seem to) cost them anything? I have contacted SL, but they seem to just confirm that my understanding is correct, but surely it can't be? Any help/explanation gratefully received, and sorry if my query just reveals my financial illiteracy!
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