In last week’s article, I asked if you guys wanted a deep dive into bonds.
Boy… the response was overwhelming:
Please do a deep dive for Bond Funds. Always talk about Reits and Banks is quite stale.
Second that! Do a primer on bond funds for retail investors! Is it better to ETF or go with active managed? If active, which funds and which platform? Which geographies and high yield or investment grade? Any tax implications we need to take note of?
The issue here is how to invest the bulk of the cash & bonds, and have it earn the stated returns with little to no risk. If a chunk of my funds are in CPF OA (eg $1million earning 2.5%), would you consider that as “bonds”? What would you recommend?
So… let’s do it.
Let’s discuss how a Singapore investor can build a bond portfolio that generates decent yield, without excessive risk.
How to get 5.5% yield buying Bonds in 2024?
The logic is similar to stocks.
There are 3 ways you can buy bonds:
Buy individual bonds by yourself Buy a bond ETF Buy a bond fund
In my personal view – a mix of Option 1 and Option 3 is the best approach (and what I have been doing myself).
But I know not everyone agrees with me, so let’s walk through each of the 3 options.
Buy individual bonds by yourself
Now the main problem with buying bonds by yourself.
Is that most of the “good” bonds from say DBS or HSBC or SIA are not offered to retail investors.
Which means that you need to be an accredited investor to buy, and in many cases the minimum subscription amount is as high as $250,000 (not