Corporate bonds for Retail

MrGecko

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Is it possible for guys like me to get their hands on corporate paper and hold until maturity?

Most other asset classes (equities, commodities and FX) I think I can replicate pretty well with ETF's, but with the bond ETF's I am putting my principal at (greater) risk, am I not?

If I find a 5yr bond, provided the company doesn't go bust, obviously, I get my principal back. If I do it via an ETF, come 5yrs (when I need the cash), my principal will be reflected in the spot value of the ETF - which tracks an index - which could be lower that I bought it at.

Have I understood this correctly?
 
some corporate paper is issued in pretty small size, you could buy that pretty easy I think... alternatively how choosy do you wanna be... it's CP ffs...? investing in a unit trust or similar you're not exposed to the manager?
 
some corporate paper is issued in pretty small size, you could buy that pretty easy I think... alternatively how choosy do you wanna be... it's CP ffs...? investing in a unit trust or similar you're not exposed to the manager?

I don't mind him managing his box if he's got a remit I'm happy with (and as long as he sticks to it, of course).

As for choosy... well, I'll do my due diligence of course - in an ideal world I would spread it in 2D over grade / duration in sector's that I don't think will blow up in my face. I mean, what is the duration of an ETF?

p.s. define small size...
 
Thanks for that... although I had hoped there would be more variety than that.

As for why, all part of asset allocation old bean. If I'm gonna p!ss off for a few years, I am gonna have to put the money somewhere, neh? Rather not stick it all in a tracker fund, if I am honest.
 
Is it possible for guys like me to get their hands on corporate paper and hold until maturity?

I can't speak to the specifics of other markets, but in the US a great many corporate issues are exchange listed and thus pretty readily tradable. They are generally listed with a $1000 notional value, so pretty easy for the small investor to handle.
 
I can't speak to the specifics of other markets, but in the US a great many corporate issues are exchange listed and thus pretty readily tradable. They are generally listed with a $1000 notional value, so pretty easy for the small investor to handle.

thats what I thought
 
Too much risk you think?

No such thing as too much risk... just that the reward is pathetic.... there no reason a diversified portfolio would need every asset... basically bonds r for benders...

gecko can PM me about my iraqi stock market punt if he wants :D

(I'll let him know what we've bought after we've bought it ;))

((Iraqi thing rocks. We even need to register at iraqi embasssy we're so pioneering....))
 
No such thing as too much risk... just that the reward is pathetic.... there no reason a diversified portfolio would need every asset... basically bonds r for benders...

gecko can PM me about my iraqi stock market punt if he wants :D

(I'll let him know what we've bought after we've bought it ;))

((Iraqi thing rocks. We even need to register at iraqi embasssy we're so pioneering....))

Well other than dividends, what other sources of income can I get my hands on?
 
Well other than dividends, what other sources of income can I get my hands on?

Buy a couple bags of gold and some junk silver :)
Are you just after income or are you after capital increases as well?
If just income, the Motley Fool have some discussion about a high yield portfolio for income only but that's a whole separate matter.
 
Buy a couple bags of gold and some junk silver :)
Are you just after income or are you after capital increases as well?
If just income, the Motley Fool have some discussion about a high yield portfolio for income only but that's a whole separate matter.

See-ing as I haven't got a scooby-doo on where we will be from 6m+ until.. well whenever, I don't want to expose myself to much directional risk. But I have to put it somewhere, and all in the bank paying (fück all)^1/2 doesn't blow my skirt up. I want to explore the options.

Also bear in mind that I don't want to have to manage it much, either.
 
still confused why you need corpy bonds... you I assume understand they can be replicated with govvies and stocks... so why complicate things....
 
you I assume understand they can be replicated with govvies and stocks...

in terms of replicating the payout? no, this is news to me... on reflection I think I can see the "why's", but unfamiliar with the "hows". I've got that f*ckin fabozzi book somewhere...
 
Where's the first stop Gecko? I'm gonna be in the Alps early March if you're in France :)


interesting

http://www.quoniam.de/fileadmin/images-content/Research/BEA_insight4Q09.pdf

Aren't you open to vol on the stock portion of portfolio with this type of strat though? I'd have thought capital loss on equity would be more likely than a restructure of corp short term bonds. :S

If this is a straight divi yield +(capital app/depreciation) vs coupon, I'm a sh1tbag, I'd take the bond :D
 
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