Retail investors are increasingly eyeing the bond market as economic uncertainty and expectations for changes in interest rates create a pressing need for stable, income-generating assets.

In response to this growing demand, Public.com, an investment platform known for its broad range of asset offerings, has introduced a new Bond Account aimed at making bond investing more accessible to individual investors.

Retail Traders Eye Fixed-Income Markets

Traditionally dominated by institutional investors, the bond market now sees increased participation from retail traders.

This shift is largely driven by the prospect of potential Federal Reserve rate cuts later this year and into early 2025, which has spurred a rush to lock in current high yields.

The heightened appeal of fixed-income assets also counterbalances the volatility in equity markets.

Earlier this month, long-dated Treasury bonds, as broadly represented by the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) rallied when the broader stock market plunged, underscoring the role that fixed-income assets can play in a balanced investment portfolio.

Public.com's Approach To Bond Investing

The Public.com's Bond Account is a self-directed brokerage account, enabling investors to purchase a curated selection of investment-grade and high-yield corporate bonds. Yields are locked in at the time of purchase, and investors can benefit from fractional bond investing,

The Bond Account addresses the accessibility issues that have historically kept retail investors out of the bond market. With a minimum investment requirement of just $1,000—significantly lower than the industry standard of $10,000—this new account allows investors to participate in a diversified portfolio of ten corporate bonds.

These bonds are issued by companies across various industries – including Boeing Inc. (NYSE:BA), Tapestry Inc. (NYSE:TPR), Warner Media LLC, Main Street Capital Corp (NYSE:MAIN), and Vornado Realty LP with yields ranging from 6% to 9% as of Aug. 12, 2024.

"Last year, we introduced the concept of the Treasury Account: an automated investing feature that made buying T-bills an easy experience for retail investors. Due to the simple user experience and high yield of short-dated treasuries, it became the most invested-in asset throughout the year. Now we're doing the same, but for corporate bonds, where yields are higher, and the underlying investments are more diversified," said Jannick Malling, Co-CEO and Co-Founder of Public.

There is a monthly maintenance fee for the Bond Account. Premium members of Public.com are exempt from this fee, while non-premium members will be charged $3.99 per month. However, this fee is waived until Jan. 1, 2025.

Public.com has also introduced an income hub within the platform where members can track their accrued and projected income from the Bond Account.

In the coming weeks, the broker plans to expand this tool to include tracking for dividend payments, individual treasury and corporate bonds, music royalties, and the Bond Account, allowing members to see both past and future income in a comprehensive manner.

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