corporate bonds

A dangerous consensus

Livewire Exclusive

At the height of the financial crisis, credit markets seized up and liquidity disappeared. In the aftermath of Lehman’s bankruptcy, this caused huge headaches for investors, institutions, and regulators. It may surprise you to learn then, that turnover in these markets is lower today than it was at the nadir... Show More

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7 considerations to help you invest in corporate bonds?

Elizabeth Moran

Investing direct or through exchange traded funds (ETFs), or managed funds has advantages and disadvantages; just like investing in shares, the decision depends upon the individual. While my preference is direct investment, the minimum needed is $250,000, making it difficult for smaller investors to access. Show More

corporate bonds bonds FIIG

Spectrum Insights – Average focus, below average outcome

Damien Wood

Investment prices keep rising. Valuations are now well beyond long term averages for many asset classes. Pundits are increasingly calling for a big correction. Fears of overvaluation is also found in the corporate bond market. Credit spreads – the extra margin for default risk – are now notably lower than... Show More

How many RBA hikes can you handle?

Callum Thomas

With the consensus slowly but surely shifting to expect rate hikes from the RBA, it's worth thinking about the impact of RBA hiking cycles on asset markets. One asset class we recently looked at is Australian credit spreads - we took a look at a few different drivers, and the... Show More

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Australian banks– flaunting history

Damien Wood

Risk management, or the lack of it, is usually the key difference between the fortunes of banks when times get tough. History books are full of evidence of what went wrong after a financial calamity. That’s the easy part. The hard part is to foresee the problems. The high level... Show More

The Best Bond?

Damien Wood

The argument usually comes down to Connery or Craig. Both highly popular James Bonds brought different styles to the big screen. The “best” 007 actor, though, maybe more a case of which one best suited the social environment of the time. For investors, the best bond, similarly, largely depends on... Show More

Time to start taking duration risk seriously

Richard Murphy

UBS and Goldmans have just called the timing on Australian cash rate rises – early 2018, based on inflation growth. Fixed income fund/ETF investors who have benefited from falling rates need to take account. The AFR’s Christopher Joye has also rightly focused on growing fund duration risk in many articles,... Show More

corporate bonds etfs fixed income managed funds duration risk

The big risk to corporate bonds

Nicholas Forsyth

Every Monday, the team at Market Matters answers a number of questions from our subscribers. Today’s question is… “In today's Morning Report you talk about the danger in the bond market. I have a portfolio of commercial bonds from FIIG which is returning me about 7% pa. These are mainly... Show More

corporate bonds Longform

Interview with Peter Switzer on What's Cheap/Expensive

Christopher Joye

In this interview I discuss with Peter Switzer what asset-classes are cheap and expensive and what the bond market is telling us about the economy. I also shed some light on our contrarian investment style in which the cash deposit weight in our core portfolio has oscillated between circa 15%... Show More

equities corporate bonds credit bonds switzer cheap expensive

Spectrum Insights - What a waste of debt

Damien Wood

Debt can do economic good - that is, if its proceeds are put to productive use such as infrastructure or education. However, Australia’s debt binge since our last recession has gone largely towards rising home valuations. This debt not only has little long term economic benefit, it has made the... Show More

Fixed income in the lower for longer world

Richard Murphy

It's becoming increasingly apparent that central banks the world over are expecting low interest rates to prevail for many years to come. Right across the globe, low interest rates are the new norm. The crucial point is this: the current global and financial environment is unprecedented. So, what are the... Show More

Brexit – keep calm and carry on in A$ corporate bonds

Damien Wood

Brexit means uncertainty. Uncertainty on its impact on the UK economy and uncertainty on whether it sets a precedent for others in the EU. And investment markets do not respond well to spikes in uncertainty. But what does it mean for Australian corporate credit risk? Next to nothing. Earnings and... Show More

Not another China bust story

Damien Wood

Readers of recent financial media are regularly exposed to China Doomsters assuring us that a China economic crash is just around the corner. We agree that the Chinese economy has too much debt that was built up too quickly. This has promoted excess capacity in its economy causing large levels... Show More

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Malcolm in the middle

Richard Murphy

A survey at the SMSF Association conference in Adelaide asked advisers if they thought hybrids were fixed income securities. 47% said they were, or they were unsure. Show More

corporate bonds fixed income Hybrids capital stability

Rising defaults – should bond investors worry?

Damien Wood

The Australian credit cycle may be taking a turn for the worse. Local banks have recently reported rising bad debt problems. But before corporate bond investors rush to dump their bond funds, we advise to pause and put things in perspective. Bad debts are currently near zero percentages in Australia.... Show More

corporate bonds income fixed income defaults household debt

Bondholders to benefit from BHP dividend cut


As expected, BHP has slashed its dividend and abandoned its progressive dividend policy. It’s a sensible move designed to protect the credit rating and has been well received by bond markets. In addition, BHP announced USD3bn in capital expenditure cuts over the next 18 months. Capital expenditure is now expected... Show More

corporate bonds reporting season ASX:BHP

Commodity Crunched? Try A$ corporate bonds

Damien Wood

When markets are in extreme fear or greed mode, new selling or buying can have an outsized impact on prices. Right now, many markets are near panic mode. We believe the reported selling of assets by Sovereign Wealth Funds (SWFs) is contributing to the scale of the plunge. The driver... Show More

corporate bonds income fixed income capital protection

Hard earned but decent returns – 2016 A$ corporate bond outlook

Damien Wood

The year 2016 looks like being a battle between greed and fear with regards to Australian dollar corporate bonds’ performance. Greed will be driven by investors increasingly frustrated by falling deposit yields. Fear looks most likely to come from abroad, namely, prevailing low commodity prices causing rising defaults in the... Show More

corporate bonds income fixed income Outlook for 2016 2016 outlook

S&P: 17 percent of global corporates on credit watch

Livewire News

The number of negative outlooks for global corporations has exceeded the number of positive outlooks by the widest margin since the depths of the global financial crisis, according to ratings agency Standard & Poor’s. “This outlook distribution suggests that negative ratings actions are likely to continue to outnumber positive ones... Show More

corporate bonds

5 records broken in shocking year for bonds

Livewire News

A number of records were broken in 2015 in corporate bond markets, but not records investors would be happy about. 1) About 9 percent of the high-yield market now boasts yields above 20 percent—the highest amount since the financial crisis. 2) Junk bonds recorded their worst annual returns in a... Show More

corporate bonds high yield bonds