When investing in bonds, two common avenues are buying bonds directly Over the Counter (OTC) or buying bond Exchange-Traded Funds (ETFs). Both methods offer exposure to fixed income markets but differ significantly in terms of how they function, the risks involved, and the benefits they provide. This article explores...
Are we nearing the top of the interest rate cycle?
Perhaps. One sign that might suggest we are close was this week’s announcement of October’s retail sales rates. Rates declined unexpectedly with spending down 0.2%, when it was projected to increase by 0.6%, perhaps a signal that the RBA’s cash...
Returns on investments just keep getting lower. As cashed-up investors look to alternative investments, fixed income funds have been beneficiaries.
Fortunately, some funds have been sympathetic to investors’ plight and the need for income and dropped fees accordingly. However, others persist with a high fee agenda, are the fees worth...
The fixed income asset class covers a broad range of investments: deposits, bonds, hybrids and securitised investments such as asset backed securities and residential mortgage backed securities.
Eight reasons to consider investing in some of the fixed income securities listed above:
Diversification – you can access governments, companies and investments...
What is a bond?
Companies often need to raise external funds to grow. There are two ways they can do this:
Raise equity by issuing shares
Take on debt by borrowing money
Practically all companies use banks to borrow, but companies can also by-pass the banks and borrow from investors by...
