A bond can be purchased by an investor who is, in essence, lending money to the company or organisation that issues the bond. In return, investors will receive fixed coupon payments from the bond issuer.
Bond issuers, generally corporations or governments, are obliged to pay investors interest on a fixed basis. Payment can be made quarterly, bi-annually or annually. At the maturity date, the bond issuer is required to repay the principal to the investor, in accordance with the terms spelled out in the offer document.
Safer Than Shares
It is generally safer to invest in bonds than shares. If a company goes bankrupt, bondholders, as creditors, are paid ahead of equity owners. This means they stand a better chance of recovering part of their investments.
Security and Predictability
Bond issuers are obliged to pay out coupons, giving investors stable returns. Bond issuers guarantee that investors will get their money back at the end of the bond tenor.
Relatively Attractive Returns
As an asset, bonds typically pay higher interest rates than bank deposits. They provide a better investment vehicle for investors who are dissatisfied with low deposit rates but may not be willing to take on more risks in the stock market.
UOB Kay Hian offers a broad selection of over 300 bonds, including sovereign bonds, corporate bonds and dim sum bonds. You can build a diversified portfolio that has a lower risk profile than an equity portfolio, all while enjoying stable returns.
As one of the biggest brokers in Asia, we enjoy direct access to bonds issued in key markets. This allows us to seek the best prices for you to seize all market opportunities.
We offer margin financing for selected bonds. At UOB Kay Hian, we can finance up to 85% of the value of a bond, which will help you invest more efficiently.
Our dedicated specialists are always on hand to provide the support and information that you need when making key investment decisions or executing orders.
Certain bonds can be placed in custody with the Central Depository at the Singapore Exchange, which helps to lower charges. We can fully utilise these facilities to help you cut safekeeping fees.
Open a UTRADE account today and start trading on the premier platform you deserve.
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Start trading bonds with UTRADE or contact us at 6536 9338 for further assistance.