Corporate bonds

Hi Team

I’m keen to add corporate bonds to my portfolio and would your appreciate advice on the different ways to do it.

There aren’t many listed bonds and XTBs don’t appeal. As for the over the counter market which seems to have more choice, I looked at FIIG but their minimum portfolio size is 250k, which excludes me at this stage.

The only other company I can find offering the same sort of service is Australian Bond Exchange. Can you offer an opinion there please? Are there other options?

Thanks

A: Thanks for the question.

I can’t offer an opinion on Australian Bond Exchange – to be honest, I haven’t heard much about them and their website doesn’t really say a lot.

 

If $250K is above your investment parameters, then options you could consider are:

  1. Listed hybrids on the ASX;
  2. A managed fund (there are several that specialize  in corporate bonds); or
  3. An ETF. Both Vanguard and iShares have ETFs that track corporate bond indices(VACF and IHHY).

 

In regard to (b), if you are looking for a fund with a short duration that maintains investment grade credit, you might like to consider the Halidon Yield Enhanced Fund that we manage.


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