Participation Bonds are governed by rules that assure its stability and security as an investment vehicle. The FedBond fund holds a portfolio of first mortgage bonds over South African Commercial, Industrial and Retail property. The fund may only lend up to 75% of the value of a property to be mortgaged, which ensures capital preservation, as the 25% serves as additional security that can be used as a recovery mechanism if need be. In the event of a default by a Borrower, FedGroup will take steps to the recover the outstanding amount. Certainty of capital preservation ensures protection of the initial investment amount.
