In recent years investment bonds have been heavily promoted and have sold well, offering decent returns which have been particularly welcome in the light of the recent stockmarket volatility. With-profits bonds, in particular, are increasingly popular as a stepping stone between equities and deposit accounts.

The factors that drive the market for investment bonds are discussed within this report. Investment bonds are 'pooled' investments, whereby the fund is spread across a range of underlying investments. Stockmarket turbulence, therefore, often leads to greater interest in bonds. As a lump sum investment, bonds will only really be applicable to a relatively limited section of the population, and these consumers are identified.

In recent years investment bonds have been heavily promoted and have sold well, offering decent returns which have been particularly welcome in the light of the recent stockmarket volatility. With-profits bonds, in particular, are increasingly popular as a stepping stone between equities and deposit accounts.

The factors that drive the market for investment bonds are discussed within this report. Investment bonds are 'pooled' investments, whereby the fund is spread across a range of underlying investments. Stockmarket turbulence, therefore, often leads to greater interest in bonds. As a lump sum investment, bonds will only really be applicable to a relatively limited section of the population, and these consumers are identified.

Mintel assesses the size of the market for investment bonds by individual types of investment, as well as the overall market. The major life offices in this sector are also detailed. Distribution of bonds is primarily through IFAs, as they are a fairly complex investment vehicle and need to be sold to consumers. The distribution and promotion of investment bonds is also considered.

Specially commissioned consumer research was conducted among a representative sample of 1,792 adults to determine attitudes towards wider investments in general, and bonds in particular. Respondents were asked about their main concerns when investing and how they would envisage spending a lump sum in the future. Cross-analysis of the sample was carried out to identify the future target market for investment bonds.

Coverage of this study is restricted to insurer investment bonds. Therefore, this report does not cover government bonds (gilts), or corporate bonds. The market size of the investment bonds sector is forecast over the next five years, together with the envisaged future developments in this area.

Other Mintel reports of relevance to this market include:

- ISAs, Finance Intelligence, May 2001

- Interactive Investing, Finance Intelligence, April 2001

- Deposit and Savings Accounts, Finance Intelligence, March 2001

- Collective Investments, Finance Intelligence, August 2001.