We asked Markus Meuller from ABE to give us an outline of the Bond market in Australia and his opinion of bonds as an investment opportunity. Here is what Markus had to say:
“With equity markets becoming increasingly volatile and as economies struggle to adapt to the new world order, investors are increasingly turning to fixed income as the go-to investment as they seek stability and income.
Bonds in Australia continue to remain under-represented on average in all retail portfolios which is dangerous, given our ageing population and a persistently low interest rate environment. We believe that as people become more aware of the benefits of bonds, we will start to see a shift away from other asset classes to fixed income, especially given the bond market is twice the size of the equity market.
In addition, with the current economic environment, investors are forced to rethink their income strategies. However, investors do have to be careful when choosing their bonds and with hundreds of categories available, quality advice is an important factor. Investors tend to look at Corporate bonds which are offering the most attractive terms with yields in the range of 2% - 5% with various durations from 1 to 10 years.
Our aim at ABE is to level the playing field for all investors by bringing the OTC wholesale bond market back to ordinary investors by using a revolutionary cost-effective platform that allows retail to buy and sell individual corporate bonds at their discretion. We are offering minimum investments as little as $10,000 per bond with no ongoing fees.
Investing in bonds through AMM’s marketplace is as easy as a term deposit and you will find a selection of bonds on the Australian Money Market platform.”