As more Australians increase their allocations to government and corporate bonds, it is important to understand the two different ways you can make an investment.
Just like shares, you can either buy and sell them directly or you can have someone else manage them for you. In the fixed income...
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...
Even though interest rates are low and depositors get paid very little, especially if they pay tax, there are some significant advantages in deposit investments:
Depending on the type of deposit, access to your funds if you need it.
The Commonwealth Government Financial Claims Scheme (FCS), which aims to...
Macquarie Bank’s new hybrid with an attractive margin of 4.7% over 3 month bank BBSW, begs the question – is it a good time to buy hybrids?
Current trading margins on hybrids average around 4.4% per annum but spiked at over 7% recently. Before CONVID-19, margins were significantly lower.
Current yields...
The Australian Commonwealth government along with the states and territories issue bonds to help pay for goods and services they provide. Globally, other sovereigns and their states and municipalities as well as government run entities also issue bonds. Combined, global government bonds make up a large percentage of the...
There has been a growing sense of responsibility from investors demanding ethical, sustainable investments with the aim of providing positive returns and having a long term impact on society.
According to Responsible Investing Association Australasia (RIAA), total assets under management engaged in responsible investment grew 39 per cent in 2018...
Bonds are useful in different economic conditions. Fixed rate bonds provide certainty in declining interest rate environments, floating rate notes pay a fluctuating rate of return and are often sought after when interest rates are rising. While inflation linked bonds are a very good long term hedge against rising...
This month AMP issued a new hybrid. AMP planned to raise $200m via an issue of Capital Notes 2 (ASX code: AMPPB) securities, which it exceeded, raising $275m. The securities are perpetual, convertible, subordinated, non cumulative, unsecured notes and the proceeds used to fund “one or more APRA-regulated entities...
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...
