In the uncertain global economic situation, many people stay away from stocks. However, interest rate on bank deposits is too low. An alternative is to invest in government and corporate bonds. Read "invest in bonds" in www.tankinlian.com/ask.aspx.
In my opinion, I think bond unit trust that invest primarily in SGD denominated bonds that are investment grade or issued by GLCs (since these bonds have no rating) is the most convenient option for the layman. Yes, the expense ratio is can be as high as 1% but the net yield historically is 2-3% after expenses (so not so bad). My gripe with SGS bonds (not talking about corporate since it is out of reach of most people) is the inconvenience. Unless you want to buy bonds on the secondary market, one has to follow the bond issuance calendar which makes things very complicated especially if you are saving and investing regularly.
In my opinion, I think bond unit trust that invest primarily in SGD denominated bonds that are investment grade or issued by GLCs (since these bonds have no rating) is the most convenient option for the layman. Yes, the expense ratio is can be as high as 1% but the net yield historically is 2-3% after expenses (so not so bad). My gripe with SGS bonds (not talking about corporate since it is out of reach of most people) is the inconvenience. Unless you want to buy bonds on the secondary market, one has to follow the bond issuance calendar which makes things very complicated especially if you are saving and investing regularly.
ReplyDeleteThat's my issue with SGS bonds as well, the bond issuance calendar.
ReplyDelete