To make bonds more accessible to investors, Phillip Bond Desk is proud to launch our new Bonds50 product line. Bonds50, as its name suggests, are wholesale bonds traded in lot sizes of SGD50k instead of the usual SGD250k, greatly freeing up cash in your portfolio instead of locking in the quarter million dollars per bond. This allows you to have a greater number of bonds in your portfolio and makes building a diversified bond portfolio much easier and possible. See our recently launched Phillip Model Bond Portfolio to get the list of bond picks we recommend for your portfolio!
Our flagship list of Bonds50 bonds features 5 bonds from a range of issuers including blue chip companies from various industries. The list will be expanded as time goes, or you may submit indications of interest for a new bond to be added.
View current prices and place trades for the bonds here:
- ESRCAY 6.750% 01Feb2022 Corp (SGD)
- ARASP 4.150% 23Apr2024 Corp (SGD)
- OLAMSP 4.000% 24Feb2026 Corp (SGD)
- SUNSP 2.950% 05Feb2027 Corp (SGD)
- CAPLSP 3.080% 19Oct2027 Corp (SGD)
Note that Phillip Bond Desk does not charge commissions on bond trades, thus you may purchase as many bonds as you’d like without worrying on transaction fees eroding returns. However, do take note of erosion of returns through bid and ask spreads if you wish to buy and sell frequently. Bonds50 works exactly the same as wholesale bonds and is traded Over-The-Counter. When it comes to selling your Bonds50 bonds, trading liquidity will be good as Phillip Securities as the counterparty for your sell trades. Both online and offline trading are available.
Why corporate bonds?
Corporate bonds have been largely inaccessible to the larger public other than through retail bonds. This is because of their high denominations of at least S$250k per lot exacting a heavy toll on many peoples’ cash flows. The corporate bond market is large and largely active by institutional investors such as insurance and CPF funds that rely on their promised yields and principal return. With Bonds50, more flexibility is provided to more investors.
As it stands, bonds not only play a large part in generating passive and predictable income streams, but they also play key role in hedging investment portfolios. By having bonds in your portfolio, it helps to reduce overall volatility both in terms of portfolio value movement as well as cash flows received. And because bonds have a maturity date, or a date at which your principal is promised back to you, they’re a great alternative to fixed deposits, paying a higher return with lower exit penalties.
Higher returns will entail higher risk, though. However, take heart that corporate bonds are generally lower risk than stocks due to their higher rank in the seniority chain. If a company goes bankrupt, bondholders and creditors get paid before shareholders.
Who can purchase Bonds50?
To trade our new Bonds50, you’ll have to declare as an Accredited Investor, which has the criteria of minimum S$2 million in assets, or S1 million in financial assets, or at least S$300k in annual income. To complete the declaration, please download the form via this link. After completion, email the form (e-signature accepted) with images/scans of the relevant supporting documents (listed in the form) to your Phillip Financial Advisor or Trading Representative for processing.
Be sure to be an existing POEMS account holder first. Not yet a POEMS account holder? Open an account online here. **Please select ‘Cash Plus Account’ type as Bonds50 is only available for custodian account trading.
Important Notes:
- Open Market transactions
Bonds50 are Odd Lot sized bonds and may not be able to transact via the Open Market due to smaller denominations. - Transfer of Custody
Bonds50 bonds will not be transferrable out of Phillip Securities Pte Ltd custody due to minimum denomination requirements of clearing systems. However, if you have a SGD250k lot size of a specific bond in your account, you will be able to transfer that bond out. - Rights to Vote
As clearing systems only recognize votes cast for securities held in its intended denomination, Phillip Securities Pte Ltd reserves the right to vote, to give instructions or to give consents (or otherwise), on behalf of you at our discretion, at any meeting or event as conducted pertaining to the security. - Amalgamation
All holdings of the same security will be amalgamated upon settlement. - Payment for Purchases
Your trading account must be pre-funded before any Bonds50 purchases. Funds will be automatically deducted from your trading account ledger upon settlement of the purchase. - POEMS Account Types available for Bonds50 trading
Only custodian based accounts with Phillip Securities are able to trade Bonds50. This includes the Custodian account, Cash Plus account, and Margin account. - No Bond Financing
Bond Financing facilities will not be available for Bonds50.
Bottom Line
With Bonds50, more flexibility is provided to fixed income investors; to build diversified bond portfolios and to access a larger piece of the wholesale bond market. You’ll be able to trade Bonds50 bonds online via our POEMS 2.0 trading platform or through your Financial Advisor at your convenience.
Get any of your Bonds50 enquiries answered by emailing Phillip Bond Desk at bonds@phillip.com.sg or contacting us at +65 6212 1818.
