MBH/A35 alternatives

[simsim1234]

All stated above already. Depending on your needs, you should choose what works best for you. Regardless with yield curve flattening now, Tbills and/or short duration bond funds should work well.

Why no bond ETF that will hold bonds until maturity before recycling? I hate the bond fund managers actively trading and trying to act smart by selling before maturity (when they are not supposed to).

 

[s0crates]

Why no bond ETF that will hold bonds until maturity before recycling? I hate the bond fund managers actively trading and trying to act smart by selling before maturity (when they are not supposed to).

They are just following the fund mandate. Even if they actively trade they are following the mandate. read your fund prospectus to know better.

 

[s0crates]

https://www.straitstimes.com/busine...ive-key-to-passive-income-amid-high-inflation
Quite an insightful take on why fixed income markets have done poorly recently and how it should reverse soon.

Unfortunately/fortunately observations made don't translate to a more active investment strategy from endowus. Leave it to the fund managers I guess?

 

[s0crates]

6 months t-bills are above 3% now. Again, hope investors please please carefully think through why you are getting higher duration risk for lower returns, and your approach to fixed income/bond investing.

Recent inflation figures and fed stance just makes things more complicated.


https://forums.hardwarezone.com.sg/threads/singapore-treasury-bills-t-bills.6769601/page-67

 

[jayou8]

With the yield of SSB SBNOV22 around 3.2%, these bond funds really looking extremely unattractive now. Anyone still actively looking at these and what are your targets to get in?

 

[reddevil0728]

With the yield of SSB SBNOV22 around 3.2%, these bond funds really looking extremely unattractive now. Anyone still actively looking at these and what are your targets to get in?

Technically no depending on time horizon.

because when price is also lower, so might be the best time to load up. And when the time comes for a rate cut, this might in fact increase.

so all depends on time horizon

 

[d5dude]

With the yield of SSB SBNOV22 around 3.2%, these bond funds really looking extremely unattractive now. Anyone still actively looking at these and what are your targets to get in?

SSB cap is only 200k, and monthly allocation is usually very low, I think bonds/bond funds still serve a purpose.

 

[jayou8]

SSB cap is only 200k, and monthly allocation is usually very low, I think bonds/bond funds still serve a purpose.

But if I look at the current on the run SGS with duration of 5-8 years left, they still look much attractive. no?

 

[reddevil0728]

But if I look at the current on the run SGS with duration of 5-8 years left, they still look much attractive. no?

It might be easier to sell MBH/A35 than to sell a SGS Bond, because of liquidity.

the transaction cost and the spread too. need to take all that into consideration if you cannot hold

 

[d5dude]

But if I look at the current on the run SGS with duration of 5-8 years left, they still look much attractive. no?

I have no idea what A35's YTM is right now.

 

[reddevil0728]

I have no idea what A35's YTM is right now.

According to Fact Sheet as of Aug 22 is 3.15%

For MBH 3.91%

 

[d5dude]

According to Fact Sheet as of Aug 22 is 3.15%

For MBH 3.91%

A35 is down another ~3% since 31 Aug, so YTM is slightly higher now, but still not attractive compared to current SGS yields, SGS 5yr yield is 3.54% right now.

Also theres a 0.25% expense ratio.

 

[BBCWatcher]

Nikko AM will probably publish updated weighted YTM figures for MBH soon (through September 30, 2022), but my back-of-the-envelope calculations suggest that MBH is right about where you'd expect it to be with a materially higher weighted YTM than comparable tenor SGSes. Otherwise the bond market would be broken, and it's not often broken.

A35 is really only a way to invest in SGSes in an alternative and sometimes convenient fashion. But you'll pay a little for the convenience.

 

[CaptainWu]

MBH probably with yield near 4% with the current price. Not bad with a pretty safe investment on IB bonds and with the liquality.

 

[churnmaster]

According to Fact Sheet as of Aug 22 is 3.15%

For MBH 3.91%

Should be around 3.5% for A35 and 4.2% for MBH.

This is before fees.

 

[reddevil0728]

MBH probably with yield near 4% with the current price. Not bad with a pretty safe investment on IB bonds and with the liquality.

what's IB Bonds?

 

[churnmaster]

what's IB Bonds?

Read as IG

 

[s0crates]

MBH probably with yield near 4% with the current price. Not bad with a pretty safe investment on IB bonds and with the liquality.

Pretty safe? I thought people would have been a bit cautious to use the word safe for bond funds after the markets schooled them on duration risk lol.

 

[reddevil0728]

Pretty safe? I thought people would have been a bit cautious to use the word safe for bond funds after the markets schooled them on duration risk lol.

depends on your definition of safe? safe can be the underlying are almost capital protected? because of the fact that they are holding AAA government bond?.

like the underlying don't default.

 

[s0crates]

depends on your definition of safe? safe can be the underlying are almost capital protected? because of the fact that they are holding AAA government bond?.

like the underlying don't default.

Yea of course. My point is that I rather hold a junk bond that is due in 3 months than a AAA SGS bond fund with a super long duration, and that should be the case for most people too.

Safety from duration risk should be considered more than credit rating.