Invest
Low bond yields here to stay, warns expert
Global bond yields are at historic lows and are unlikely to improve any time soon, according to one expert.
Low bond yields here to stay, warns expert
Global bond yields are at historic lows and are unlikely to improve any time soon, according to one expert.
ABC Bullion’s global general manager Nicholas Frappell says interest rates will stay low for the foreseeable future, with a search for higher yields sending investors elsewhere.
“It used to be an iron rule that when you lent someone money, you were compensated in the form of interest. That’s no longer the case anymore,” Mr Frappell said.
“We now live in a world where interest rates are very close to zero and in the developing world there is almost US$10 trillion in negative yielding debt.”
Mr Frappell said the recent emergence of negative yielding debt in Europe is likely to continue.
“A fortnight ago, the German government sold the equivalent of A$6 billion of ten-year debt at a negative interest rate of five basis points.
“It’s the first time they’ve ever done that and it’s likely to become the new norm in the eurozone.”
Low interest rates both in Australia and overseas are also likely to remain.
Mr Frappell believes that with enormous US-denominated debt worldwide, the US Federal Reserve would be cautious in its decision to hand on rate hikes for the near future.
“Each rise makes that debt more and more expensive, pushing the bubble higher which could spur problems in emerging markets that they absolutely wish to avoid.”
Mr Frappell predicted the bond market would become increasingly unattractive as certain trends continue.
“The reality here is that there’s actually a limit on just how much debt and how many bonds are eligible for purchase by the European Central Bank,” he said.
“This scarcity will push bond prices higher and hence yields lower, lasting at least until the first quarter of 2017 but almost certainly for much longer if past experience has been any kind of reliable guide.”
Bonds
Common mistakes in buying bonds that investors should avoid
The bond market is considered as a safe haven for Aussie investors and it’s easy to see why. ...Read more
Bonds
Student files lawsuit over government bonds
A 23-year-old student has filed a lawsuit against the Australian government after alleging that it failed to disclose climate change-related risks to investors in the country’s sovereign bonds. ...Read more
Bonds
Bonds in the ‘new normal’ – navigating a recession
Dampening downside risk during a global economic downturn requires active management and informed decisions, writes Justin Tyler. ...Read more
Bonds
Buyers beware of silent risks in bond markets
Investors are being urged not to fall into the trap of buying inferior-quality bonds in a low-yielding environment, despite the promises of higher returns, an industry expert has warned. ...Read more
Bonds
Reasons to invest in government bonds
Many investment experts recommend adding government bonds to an investment portfolio in order to reap its benefits while limiting risks and losses. ...Read more
Bonds
What is credit investing and how does it work?
A well-diversified investment portfolio typically includes credit investments to balance risk and return. Here’s what you need to know about credit investing and how it works. ...Read more
Bonds
Blockchain bond sees $50m boost
The first bond to be created, transferred and managed through its life cycle using blockchain technology has received a new funding boost. ...Read more
Bonds
Solutions to the record-low cash returns for investors
With interest rates expected to move lower in 2019 and a growing number of Australians joining the active retirement base each day, the hunt for investment-led income will become more pressing, a stra...Read more
Do lockdowns boost property prices? Are short-sellers levelling the playing field? Did you lodge your tax returns early?
Listen now
Will lockdowns halt the housing boom? Is the metaverse taking over? And the cons of lodging your tax returns early
Listen now
Are you being priced out of the market? Have you got the Tuesday blues? And are you ready for the upcoming super changes?
Listen now
Are property prices set to crash? Should you jump on board the fintok craze? And how to prepare for this tax time
Listen now
Bonds
Common mistakes in buying bonds that investors should avoid
The bond market is considered as a safe haven for Aussie investors and it’s easy to see why. ...Read more
Bonds
Student files lawsuit over government bonds
A 23-year-old student has filed a lawsuit against the Australian government after alleging that it failed to disclose climate change-related risks to investors in the country’s sovereign bonds. ...Read more
Bonds
Bonds in the ‘new normal’ – navigating a recession
Dampening downside risk during a global economic downturn requires active management and informed decisions, writes Justin Tyler. ...Read more
Bonds
Buyers beware of silent risks in bond markets
Investors are being urged not to fall into the trap of buying inferior-quality bonds in a low-yielding environment, despite the promises of higher returns, an industry expert has warned. ...Read more
Bonds
Reasons to invest in government bonds
Many investment experts recommend adding government bonds to an investment portfolio in order to reap its benefits while limiting risks and losses. ...Read more
Bonds
What is credit investing and how does it work?
A well-diversified investment portfolio typically includes credit investments to balance risk and return. Here’s what you need to know about credit investing and how it works. ...Read more
Bonds
Blockchain bond sees $50m boost
The first bond to be created, transferred and managed through its life cycle using blockchain technology has received a new funding boost. ...Read more
Bonds
Solutions to the record-low cash returns for investors
With interest rates expected to move lower in 2019 and a growing number of Australians joining the active retirement base each day, the hunt for investment-led income will become more pressing, a stra...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
