Capital Management Services- How To Buy Bonds In Australia So you have decided to add fixed income securities to your investment portfolio. You are happy with the bond’s rating, coupon rate and maturity date. You have ascertained the bond’s true yield to maturity, in other words the bond’s annualized yield earned upon maturity/redemption, when the interest payments and capital gains or losses are factored in. Okay, lets us look at how you go about buying your bond of choice, as there are four different types of bond investment products in Australia.
Exchange Traded Australian Government Bonds – ‘’AGB’s’’ There are a few ways you can buy this stable and secure asset class. You can either go through a registered and licensed broker, full service or discount broker and ask him/her to ‘’work your order’’, which basically means instruct him/her to go into the market and get you the best price. Alternatively, you can buy through an online execution only bond investment / trading platform. Finally, go direct to the Australian Securities Exchange – ‘’ASX’’ and buy. Simply click on asx.com.au/products/bonds/list-of-agbas.
Capital Management Services- How To Buy Bonds In Australia Corporate Bonds Companies such as Qantas, ANZ and many others regularly look to the debt market to raise funds for their operational activities. If you decide this type of bond is for you, after you have considered its PDS and in particular its term sheet, then again, purchasing these types of bonds is a relatively straight forward process. You can either buy through a broker, as above, or you can buy via an online trading / investment platform, again as above.
Non-Tradable Structured Bonds The bellwether participants in the issuance of these types of bonds are the major wealth and asset management companies, such as Allianz and Fidelity. Option one is to go onto their websites, do your research and complete an online purchase application form and when returning the same duly completed, send copies of your AML / KYC documents. Option 2 involves buying through a registered and licensed financial advisor. If you knowledge of all things investment related is limited, option 2 is probably best for you. Exchange Traded Funds There are many exchanges traded funds – ‘’ETF’s’’ available in Australia which track and follow the price movements of bonds, both corporate and government issued. In other words, these ‘’ETF’s’’ hold bonds that follow and track certain bond indexes. If you have a look at xtbs.co.au you will see a complete listing of bond based ‘’ETF’s’’ available to Australian investors. Once you have decided which one compliments your investment objectives, buying this particular investment product is straight forward.
Capital Management Services- How To Buy Bonds In Australia
Again, you can go through a broker, licensed and registered of course, or you can buy direct via one of the many online investment and trading platforms. All you need to know is the ‘ETF’s’’ ticker symbol. So buying bonds in Australia is not a hard task. However, when you decide to proceed with your chosen bond investment product, please consider your liquidity requirements, as the likes of corporate bonds are nowhere near as liquid as say, shares for example. On the other hand, high net asset value bond based ‘’ETF’s’’ are traded daily and thus liquid. For more guidance, you can opt for Capital Management Services which can provide you a proper guide to investing in the bonds to get high returns.