Log in Open account
Australia

The time to consider bonds is now

ETFs
iShares

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.


What are bonds?

Bonds are a way for governments or companies to borrow money from investors, in exchange for income, which is paid out on a regular basis.


What role do bonds play in a portfolio?

Bonds provide investors with 3 potential benefits when they hold them as part of their portfolios:

1- They provide a stream of income generally higher compared to easy access bank deposit accounts. (1)

2- They offset some of the volatility investors might see from owning stocks. In fact, bonds are considered as less risky investments compared to stocks and historically showed more price stability during market turbulence. (2) As a result, investors are using them as a diversification technique to lessen the effect of market volatility on their portfolio by distributing their investments over various assets.

Risk: Diversification and asset allocation may not fully protect you from market risk.

3- Because they repay a principal at maturity, they appeal to investors who wish to preserve capital

Sources

1 - Source: Blackrock as of June 2023. Bonds are unlike bank deposit accounts as they invest in financial markets. Therefore, there is a greater level of risk to your money, because they can go up and down in value, but this can mean greater returns. Additionally, in high inflation environment, the cash held in bank deposit accounts savings are at risk of losing value. As, inflation will reduce the buying power of your money over time.

2 - Source: Russell Investments as of November 2022. Statement based on data comparison of correlation of the daily returns on the Russell 3000™ U.S. equity index and the Bloomberg U.S. Aggregate bond index from 31 December 1986 to 31 December 2022.


Why invest in bonds now?

Following central banks decisions to increase interest rates globally in 2022 and 2023 (2), the outlook for fixed income has become much more positive. Bonds now offer more attractive yields than they have in 15 years (3), which may create more income generation opportunities for investors.

Sources

2 & 3 - Source: Bloomberg and BlackRock as of 31 May 2023


So you want to add bonds to your portfolio? Make it easy with ETFs

Unlike stocks, investing in bonds could be a bit challenging for retail investors as most bonds do not trade on an exchange—instead, buyers and sellers are required to negotiate over the counter (one on one) to agree a transaction price. In contrast, bond ETFs, like equity ETFs, trade on exchange and provide transparent pricing to a basket of multiple bonds in one transaction. While the stock exchange that the ETF is listed on is open, investors can buy and sell the ETF shares just like they would for a single stock. Investors do not have to become bond geeks or learn how to be expert bond investors to buy bond ETFs. Bond ETFs can be simply purchased just like stocks and give investors instant access to ready-made bond portfolios at low costs. 


Starting your bond ETFs journey ? Consider iBonds ETFs

What are iBonds® ETFs

iBonds® ETFs are an innovative suite of bond ETFs that have a fixed maturity date. They hold a diversified portfolio of bonds with similar maturity dates, aim to provide regular income payments and distribute a final pay out in their stated maturity year.

Why should I consider iBonds® ETFs instead of other bond ETFs available on the market?

Traditional bond ETFs do not have maturity date, as bonds within the ETF mature, and new bonds are being added. This gives a continuous, rolling exposure to bond markets. 

In contrast, like individual bonds, iBonds® ETFs have a fixed a maturity date. This means that investors can select ETFs with maturity dates that align with their investment horizons, allowing them to plan for specific cash flow events more effectively.


Benefits of iBonds® ETFs

• Easily access the bond market – iBonds® ETFs give you easy access to bond investing. Through one trade, you gain exposure to a basket of bonds and can generate attractive income.

• Choose your time horizon – invest for a period which works for your needs. iBonds® are available in a range of maturities, meaning you can choose how long you want to invest your money for.

• Flexibility to adapt – if your needs change, you can buy or sell iBonds® at any time during the trading session. iBonds® ETFs trade on stock exchanges — which means iBonds® can be bought and sold just like a stock.

• Diversification – iBonds® track an underlying index and provides exposure to hundreds of bonds, across various sectors and countries. Risk: Diversification and asset allocation may not fully protect you from market risk.


Does the timing of my investment affect the yield? So do I get more if I'm in from the beginning? Or is it evenly distributed at the end?

The expected yield is dependent on the net acquisition yield of your investment. Dependent on the timing of your investment as well as on the price at which you enter the investment, you can assess your expected yield. Each individual iBonds product page has a net acquisition yield tool, on which investors can assess their net acquisition yield.

Life of an iBonds® ETF

Disclaimer:

This document is marketing material: Before investing please read the Prospectus and the PRIIPs KID available on www.ishares.com/it, which contain a summary of investors’ rights.

Risk Warnings

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time.

Regulatory Information

In the UK and Non-European Economic Area (EEA) countries: this is issued by BlackRock Advisors (UK) Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL, Tel: +44 (0)20 7743 3000. Registered in England and Wales No. 00796793. For your protection, calls are usually recorded. Please refer to the Financial Conduct Authority website for a list of authorised activities conducted by BlackRock.

In the European Economic Area (EEA): this is issued by BlackRock (Netherlands) B.V. is authorised and regulated by the Netherlands Authority for the Financial Markets. Registered office Amstelplein 1, 1096 HA, Amsterdam, Tel: 020 – 549 5200, Tel: 31-20-549-5200. Trade Register No. 17068311 For your protection telephone calls are usually recorded.

In Italy: For information on investor rights and how to raise complaints please go to https://www.blackrock.com/corporate/compliance/investor-right available in Italian.

Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy. Choose the type of iBonds® ETF you would like to invest in. Over the life of the iBonds® ETF, investors are eligible to receive dividends. An iBonds® ETF will be delisted from all relevant stock exchanges in December of the fund's maturity year (stated in the name of the fund). All the bonds in the portfolio will be sold and the total sum will be distributed across all investors.

This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer.

© 2023 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS and iSHARES are trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners

Quarterly Outlook

01 /

  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
    Read full article
  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

    Read full article
  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
    Read full article
  • FX Outlook: USD in limbo amid political and policy jitters

    Quarterly Outlook

    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Chief Investment Strategist

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
    Read full article
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

    Read full article
  • FX: Risk-on currencies to surge against havens

    Quarterly Outlook

    FX: Risk-on currencies to surge against havens

    Charu Chanana

    Chief Investment Strategist

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo...
    Read full article
  • Equities: Are we blowing bubbles again

    Quarterly Outlook

    Equities: Are we blowing bubbles again

    Peter Garnry

    Chief Investment Strategist

    Explore key trends and opportunities in European equities and electrification theme as market dynami...
    Read full article
  • Macro: Sandcastle economics

    Quarterly Outlook

    Macro: Sandcastle economics

    Peter Garnry

    Chief Investment Strategist

    Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p...
    Read full article
  • Bonds: What to do until inflation stabilises

    Quarterly Outlook

    Bonds: What to do until inflation stabilises

    Althea Spinozzi

    Head of Fixed Income Strategy

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ...
    Read full article
  • Commodities: Energy and grains in focus as metals pause

    Quarterly Outlook

    Commodities: Energy and grains in focus as metals pause

    Ole Hansen

    Head of Commodity Strategy

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...
    Read full article
Disclaimer

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000
Australia

Contact Saxo

Select region

Australia
Australia
Products & pricing
Asset Management
    Platforms
    Accounts & service
    General
    Other
    Legal

    Trading can result in losses. Please ensure you understand the risks.

    The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

    Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

    Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

    Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

    The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

    Please click here to view our full disclaimer.