WiseAlpha, the pioneer of Fractional Corporate Bonds, has unveiled the UK’s first-ever dedicated High-Yield Corporate Bond Innovative Finance ISA (IF ISA).
This groundbreaking product opens a previously inaccessible market to retail investors, enabling them to invest in corporate bonds via an ISA for the first time.
Historically, the corporate bond market has been off-limits to retail investors due to prohibitive minimum trade sizes of £100,000. With WiseAlpha’s launch, investors can now build diversified corporate bond portfolios within the tax-efficient framework of an ISA, marking a significant milestone in the UK’s investment landscape.
With Sterling corporate bonds offering coupons ranging from 5% to 12%, well above gilt yields and savings accounts, WiseAlpha’s High-Yield Corporate Bond ISA provides retail investors with an opportunity for higher, tax-free income.
“This is a watershed moment for the UK investment market,” says Rezaah Ahmad, CEO of WiseAlpha. “For the first time, investors can access an entire asset class that was previously reserved for institutions. Our High-Yield Corporate Bond ISA represents a leap forward in our mission to democratize finance.”
Equity investors concerned about potentially high valuations can now shift to lower-risk corporate bonds issued by the same companies. For example, investors in Ocado equities can use the WiseAlpha ISA to invest in Ocado’s 10.5% bonds. Similarly, retail investors in peer-to-peer SME lending platforms may prefer lending to FTSE-size companies via corporate bonds, potentially enjoying higher credit quality and competitive yields.
UK investors can allocate up to £20,000 for the 2024/25 tax year across Cash ISAs, Stocks & Shares ISAs, and Innovative Finance ISAs. WiseAlpha also accepts ISA transfers, offering flexibility for existing ISA holders. Investments within an ISA are exempt from capital gains and income tax, allowing investors to retain the full benefit of high yields. For example, a 10.5% bond yield within an ISA remains untaxed, compared to a potential 45% tax hit for higher-rate taxpayers investing outside an ISA.
WiseAlpha has been at the forefront of financial innovation, breaking barriers to provide retail investors with institutional-grade opportunities. The High-Yield Corporate Bond ISA is the latest step in the company’s mission to make the corporate bond market accessible to all.
Rezaah Ahmad, CEO of WiseAlpha, adds: “With the launch of our High-Yield Corporate Bond ISA, we’re empowering everyday investors to achieve higher tax-free income. This new product aligns with our vision of opening up the financial world to smaller investors and giving them the tools they need to succeed.”