Opinion
The global economy is experiencing unique business and interest-rate cycles due to factors such as COVID-19-related supply shortages, extensive monetary and fiscal support, and high inflation. Investors are watching closely for a potential shift towards fixed-rate bonds following historical patterns where bonds tend to rally after central banks end rate-hiking cycles. Despite concerns about inflation volatility and other factors, the yield curve's upward slope in Australia presents opportunities for longer-duration bond investments compared to other markets.
Opinion
In this article, the Deputy Head of Research, Garreth Innes discusses the divergence between equity and bond markets and its implications for portfolio positioning in a risk-on or risk-off environment. The article explores factors influencing the yield curve and suggests that diversified portfolios and long-term asset allocation are more important considerations than trying to predict short-term market movement.
Opinion
FY23 was marked by significant new bond issuances in Australia, benefiting bond investors due to high interest rates not seen since the beginning of the last decade. Notable issuances included Bendigo & Adelaide's covered bonds offering AAA-rated security and attractive returns, Transpower's green bond supporting renewable electricity generation, and Tier 2 notes from various banks and insurance companies offering longer lock-in periods with appealing yields. Similar opportunities are expected in FY24, with elevated interest rates presenting a good time for investors to secure stable income and returns.
Opinion
For the first time in over a decade, bond yields have exceeded equities' yields, presenting an opportunity for investors seeking income to de-risk their portfolios. Bonds offer a structural advantage with contractual payments, whereas dividends are discretionary and subject to economic conditions. Investing in lower-risk bonds provides the potential for higher income, and while there may be a sacrifice in capital growth in certain economic scenarios, the move remains attractive.
Opinion
Bond investors can enhance overall returns by trading positions before maturity, focusing on the yield offered rather than the capital price as a key factor in assessing switch opportunities within their portfolio, recognizing the interrelation between yield and capital price encapsulated in a single yield number. This flexibility allows for switching from lower-return bonds to those with the potential to deliver greater total returns, enabling continuous improvement of investment outcomes in response to evolving opportunities.
Opinion
Scams are becoming part of everyday life and we have seen a notable pick-up in activity over the last year.
Opinion
Bonds are always lower risk than shares in the same company, but do carry some of the same risks.
Opinion
Soaring inflation, rate rises and recession fears have fuelled market volatility and uncertainty, bringing the importance of portfolio diversification to the forefront of investors’ minds. Now is the perfect time to assess both the make-up of your portfolio and risk exposure within the portfolio.
Opinion
The following piece was originally published as a sponsored article in The Australian and is something we wanted to share with you to showcase the excellent value available in corporate bonds.
Opinion
New Tier 1 listed hybrid issuance has highlighted the relative value offered by Tier 2 subordinated notes, demonstrating a better risk/reward proposition. Here we look at why OTC Tier 2 notes offer significantly better value compared to Tier 1 listed hybrids.