23 May 2015


From Fundsupermart comes a new offering: Bondsupermart (or Bonds@FSM). Now we have another avenue to buy government and corporate bonds directly without having to go to the banks.

I like FSM's application interface. They tend to spot pretty clean and intuitive user interfaces.

I was initially pretty excited as I thought they were offering these bonds within reach of retail investors. Alas, not quite. They still require that the bonds be purchased in lots of at least 250,000 units (~$250K) per bond (typically).

So it is available to retail, but would require hefty investments to buy into. Nonetheless, it is an option. Need to understand their sales charges. These are documented on the website.

Saliva drip drip. For an investment of $250,000 at 4% (assuming yield to maturity of 4%), that's $10,000 per year. There are several perpetuals from blue chip companies.

Wish there was some way that those bonds can be retailed in lots of 10,000 units instead. I would definitely want it for my 10-20% bond component of my investment portfolio. But at $250,000 or more per pop, it's a bit over my head for now.

Singapore Savings Bond


la papillion said...

Hi lizardo,

Usually if we go through fundsupermart, also need to pay them a custodian fees. Not sure if the banks do that..probably they do that too.

Another thing is that I heard that we don't really need 250k. Once you have the means to open an acct with them, I think they will lend you money to buy in bonds. So say you are only require to pay down 200k, borrowing 50k at x%. So it's like leveraged yield. For blue chips, the amt borrowed will be larger and they will auto deduct from the payments received from the bonds interest.

la papillion said...

Forgot to subscribe to the comments...ignore this post.

Lizardo said...

la papillion,

Must say I have not had the benefit of utilising those services since I don't have so much spare cash lying around.

The leverage idea on bonds doesn't sound like a good idea though. The bank is making all the safe money while we carry all the risks - esp. increase in interest, and loss of capital if the underlying company folds.

Financial Journalist said...

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