What affects bond prices?
Two major factors cause bonds prices to fluctuate, interest rates and risk. Bond prices (not to be confused with bond yields) have an inverse relationship with both interest rates and risk. That means, as one goes up the other goes down. Risk and bond prices Generally, the higher the risk of a bond, the lower […]
Types of bonds & debt securities in Australia
There are only two types of bonds you can buy in Australia, but many different types of debt securities that also offer stable returns. Corporate Bonds These bonds are issued by private organisations, and can be bought either on the primary market or the secondary market. Typically bonds are issued when companies need more money […]
What are bonds and how do they work?
When a government, or a company, needs capital, it can issue debt securities and fixed income instruments (like bonds) to raise the necessary funds. When you buy bonds and other fixed income products, or hybrid securities, you’re lending money to the issuer (the government or the company that issues the bond). They then agree to […]
2024: Prime Time for Fixed-Income
Despite higher-than-expected U.S. CPI data released last week, there has been a substantial easing in the U.S. annual inflation rate, falling from 9.1% in June 2022 to 3.1% in November 2023. While bond markets wobbled on the news, Treasuries are still pricing in numerous rate cuts this year. This underscores that the market remains steadfast […]
With Rate Cut Expectations Growing – How Should Investors Position for 2024?
Despite persistent strength in the U.S. labour market with wages rising alongside robust job creation, US 10-Year Treasury yields are currently pricing in numerous cuts to interest rates as inflation tapers. Various major U.S. banks also subscribe to this view with Goldman Sachs expecting 3 25bp cuts to the Fed funds rate in March, May, […]
Playing Defensive With Corporate Fixed Income Securities
Corporate bonds and other fixed income securities have long been favoured by investors seeking a balance of portfolio stability and investment returns. Since the Global Financial Crisis (GFC) however, ultra-low interest rates had largely removed the attractiveness of the asset class – but today, we find ourselves in a very different environment, characterised by higher […]
Corporate Bonds Vs Corporate Bond Funds – What’s the Difference?
Investing in corporate fixed-income securities like bonds and market-linked notes can be a popular strategy for investors looking to boost their income. However, with such a large universe of investment options available, it can be challenging for investors to decide which securities to include in their portfolio. As a result, some investors simply opt for […]
Reasons to Invest in Corporate Fixed-Income Securities – Right Now
In today’s highly uncertain and volatile climate, corporate fixed-income securities, including bonds, provide investors with the ability to diversity their portfolio from equities, while also securing a regular and stable income stream. In this article, we outline 3 key reasons why investing in corporate fixed-income today could be beneficial for your portfolio right now. Reliable […]
Why Fixed-Income Securities Play an Important Role Within Investment Portfolios
Understanding the important role which fixed-income securities play within investment portfolios is crucial for investors of all persuasions, regardless of whether income generation or capital growth is the primary objective. The 60/40 Portfolio The 60/40 portfolio has formed the bedrock of the modern investment portfolio for decades, and for good reason. Within such a portfolio, […]
Corporate Fixed Income Securities – What Are the Benefits?
The corporate debt market is one of the largest financial markets in the world, providing the means for large corporations to raise money directly from investors to fund their operations. While smaller organisations are usually limited to bank and/or non-bank lenders to acquire funding, larger organisations can bypass such intermediaries and raise funds directly from […]