Bonds and Bond Funds
The yield of T-bills and money market funds $Fullerton SGD Cash Fund (18000222.FD)$ $Fullerton Fund - Fullerton SGD Liquidity Fund (18002838.FD)$ $CSOP USD Money Market Fund (18000597.FD)$ have started to decline in aticipation of rate cuts by the Fed in September. Is it time to consider other alternatives?
There is potential upside for short term bond funds like $LionGlobal Short Duration Bond Fund (18000390.FD)$ and $HSBC GIF Ultra Short Duration Bond MDis (18003639.FD)$ rates. Short term bonds also have higher yields currently than long term bonds due to the inverted yield curve. When the curve starts to normalise, the yield for short term bonds will be lower than long term bonds.
It should be noted that bond funds are more risky than money market funds as there is credit risk and are not suitable for everyone. The price is more volatile and can go down. Subscription and redemption also take a longer time. If you invest in a bond or bond fund denominated in a foreign curremcy, there is exchange rate risk.
Disclaimer: The above is not financial advice or a recommendation to buy and/or sell. Please do your due diligence and consult your financial advisor before doing any investment.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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费北敬 : bond seem to be a good idea, earning better than MMF
Learning Uncle : does short term bond goes up or down after rate cut?
Dadacai OP Learning Uncle : The yield will go down after 1.5 years while the price will likely go up since bonds issued prior to the cut have higher yields.
Learning Uncle : so meaning it's time soon to change funds... lol
yoongmy : interest rate going to head down and long term bond is very sensitive to interest rate changes. we should start invest to long term Bond to catch the upward.
Dadacai OP yoongmy : What type of long term bonds do you have in mind?
yoongmy Dadacai OP : $iShares 20+ Year Treasury Bond ETF (TLT.US)$
I started Invest in early Jun, can aim to take profit around at 120+- range depend on Fed interest rate decision.