In Australia the fixed income asset class receives comparatively less media attention than equities. For this reason, many investors find fixed income jargon, research and its related concepts confusing and hard to understand. However, in periods of extreme volatility relatively safe income securities can be the backstop to portfolio losses by offsetting the under-performance of other asset classes. While equities [...]
On the 23rd of February 2017, the Australian Office of Financial Management (AOFM) (which manages the country’s debt sales), sealed a record $11 billion government bond deal. This was just one month after it set the previous record issuance of $9.3 billion (January 2016). The AOFM confirmed the bond will have a coupon of 2.75% and was priced at a yield [...]
While hybrid securities are generally Australian investors’ primary choice for high income products, high-yield bond markets constitute a growing alternative. A high-yield bond is typically non-investment grade (i.e. low credit rating or unrated) and compensates investors by paying a relatively higher coupon for this additional credit risk. In the US and Europe, the high-yield bond market is large (US$1.4 trillion [...]
Following the surprise election of Donald Trump as the next President of the United States, bond markets around the world have been sent into chaos. With many of Trump’s policies reflecting a pro-growth agenda, inflation expectations (a primary driver of long term interest rates) has surged taking both the Australian and US 10-Year government bond yield along for the ride. [...]
In Australia, many investors fail to reap the benefits of geographical diversification. The international fixed income market is more than 10 times larger than the Australian market and offers a greater variety of sectors and industries. As foreign fixed income instruments are generally denominated in the base currency of country of origin, the primary deterrent of international fixed income is [...]
In a recent independent report written by the Australian Centre of Financial Studies and Monash Business School, investment options for those close to retirement were examined against the backdrop of a low-return investment environment. As the ‘baby boomers’ approach the end of their working lives, there is growing concern current low rates of return will be insufficient in providing retirement [...]
Following two cuts to the cash rate in May and August, the 10-Year government bond yield progressively decreased for the most part of 2016 as interest rates around the globe reached record lows. However, in the past few weeks, the 10-Year bond has risen in yield significantly from a low of 1.819% at the start of August to reach 2.303% [...]
Back in November 2015, news came too light that a Brazilian dam owned by a BHP joint-venture had collapsed, fatally injuring a number of employees and damaging nearby communities. This was followed by extensive legal proceedings brought forward by Brazilian government regarding clean-up costs and compensation of BRL155 billion (~AUD $62.5 million). Samarco is a joint-venture between BHP Billiton and [...]
In recent months, Alumina Limited (ASX: AWC) has been media spotlight regarding an ongoing legal dispute with its major business partner Alcoa. Both companies form part of the world’s largest Alumina business, Alcoa World Alumina and Chemicals (AWAC), which is involved in bauxite mining as well as alumina refining and smelting. Figure 1. AWAC Ownership Source: Company Reports In early [...]
Over the past week Australian government bonds have sold off which was led by overseas markets. In this article we analyse the events that have led to this and the wider implications at play for Australian bond market returns over the next 12 months. While markets have been waiting since mid-2014 for the US Federal Reserve to increase interest rates, [...]
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© Bond Adviser Pty Ltd ‧ ASFL 456783
ABN 31 164 148 467 ‧ Important Information
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
