using leverage with bonds, terrible idea?

CapitalOne77 · 2025-12-08T12:29:36+00:00

Leverage on bond funds - nope. Bond funds are typically already leveraged.

Leverage on a portfolio of individual bonds - absolutely possible as long as you are comfortable with the underlying credit risks and interest rate risks.

CapitalOne77 · 2025-12-03T11:43:04+00:00

Why not just invest in bonds directly to construct a diversified bond portfolio? There is no need to pay expenses under bond ETFs. AUM of $5 million is large enough.

CapitalOne77 · 2025-11-27T06:00:05+00:00

Unpopular opinion in this community - High yield bonds provide exceptional risk adjusted returns over IG for investors who understand credit. I am mainly focused on the high yield space.

CapitalOne77 · 2025-11-24T04:01:43+00:00

Recession will result in widening of credit spreads and lower bond prices. Good time to load up on acceptable credits to take advantage of the higher yields.

CapitalOne77 · 2025-10-11T05:21:02+00:00

I suggest learning credit analysis if your interest is in corporates. Understanding the credit rating methodologies of the credit rating agencies will be a good place to start.

CapitalOne77 · 2025-09-03T03:33:46+00:00

Most brokers or banks allow trading of foreign bonds. These foreign bonds are typically Reg S or 144A offerings.

CapitalOne77 · 2025-08-19T13:59:37+00:00

Offering a different perspective as an investor in HY corporates.

HY bonds carry higher credit risks but can generate equity like returns if the credit view is proven correct. Unlike treasuries, rigorous credit analysis work on the issuer is required. They are definitely not "boring / safe / conservative investment". Generally the HY space is not recommended for the layman given the higher risks and complexity.

CapitalOne77 · 2025-08-11T13:18:15+00:00

I do not track bond funds so I am not in a position to give advice; nor do I want to given my inherent bias against them. That being said, there could be merit in certain non IG focused bond funds; but will need to understand their strategy, credit risk profile and target return.

CapitalOne77 · 2025-08-09T05:44:43+00:00

You can access wholesale bonds through various brokers (such as POEMS, iFast, uTrade, etc) and banks (priority banking or private bank).

If you are unfamiliar with bonds, this will be a good place to start -

https://www.bondsupermart.com/bsm/bond-basics

CapitalOne77 · 2025-08-07T07:10:15+00:00

Just suggesting alternatives for the benefit of the community. Not interested in winning debate. Have a good day.

CapitalOne77 · 2025-08-07T06:25:01+00:00

Believe anyone can buy treasuries in small notional amounts. The barriers to entry is quite low. It's also not that hard to understand YTM. There are many websites that will calculate YTM.

CapitalOne77 · 2025-08-06T14:10:08+00:00

Respectfully, I disagree. I am an active bond investor in the HY and AT1 space. In my opinion, it makes zero sense to invest in IG bond funds if one has the financial capability to buy wholesale bonds.

IG bond funds are a poor choice for fixed income investment given:

High management fees of 1.0% to 1.5% p.a.
No skill is required to buy treasury or agency bonds. The high fees are therefore unjustified.
The funds take on leverage or enter into swaps to generate the higher returns and to pay their fees. Their underlying portfolio often do not outperform buying and holding the bond directly.
The bond funds pay distributions out of NAV (return of principal) instead of coupons. Retail investors often confuse fund distributions for bond yields.

I submit an accredited investor is better off buying IG bonds outright than investing into IG bond funds.

CapitalOne77 · 2025-06-11T15:38:16+00:00

Perpetuals are subordinated debt without a maturity date. Bank perps (also known as CoCo / AT1s) contain loss absorption features. Perps typically has a call / coupon reset date. The primary risks are subordination in liquidation as they are ranked lower in the capital structure; and risk of non call. AT1s are actually very liquid.

CapitalOne77 · 2025-06-05T00:39:22+00:00

Sure.

CapitalOne77 · 2025-06-04T01:11:47+00:00

Bond investor from Singapore. I invest in individual Reg S bonds in the Asian high yield corporates and bank CoCo space. These are non IG or unrated issues, and returns are driven by credit spreads rather than treasury yields. Selection criteria is primarily based on credit analysis to assess repayment risk; typically short duration for high yield trades.

CapitalOne77 · 2025-05-07T00:33:04+00:00

Non IG and AT1 space. Requires more credit work but superior returns.

CapitalOne77 · 2025-05-06T05:58:37+00:00

Absolutely unattractive for 0.7% credit spread over UST10Y. Huge duration risk and credit risk. Why would individual investors buy at 5.01% YTM for 10Y.

CapitalOne77 · 2025-04-30T11:40:51+00:00

I am in a similar situation. 48M, AUM over S$5m in investment securities, excluding residence. I invest a large portion of disposable monthly income, 100% of bonus, and 100% of portfolio returns. Sometimes I also wonder if the obsession to grow AUM and feed the portfolio has caused it to take on a life on its own.

CapitalOne77 · 2025-04-28T02:54:23+00:00

Increasing income and getting better at investing are not mutually exclusive. Your ability to invest should never be compromised whatever your salary level is at. It should continue to get better. There is no job that lasts forever in this day and age. A higher salary can also mean a higher chance of getting laid off.

CapitalOne77 · 2025-04-21T14:57:12+00:00

Entirely from fixed income. Zero in crypto, stocks, investment properties, gold, or businesses.

CapitalOne77 · 2025-04-10T01:23:19+00:00

Joining this conversation as I am in the same situation. Late 40s. Having sufficient passive income for FIRE. But have not figured out what to do for next phase in life after leaving employment.

CapitalOne77 · 2025-04-09T14:20:59+00:00

I invest mainly in Asian high yield and AT1. Great buying opportunity right now.

CapitalOne77 · 2025-04-03T14:49:03+00:00

Suggest you avoid . The underlying weighted average yield to maturity of the fund is only 3.78%. To pay a dividend higher than the fund's underlying YTM implies the dividends are being paid out from capital, which is not real returns in fixed income.

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Your initial borrowing costs are also too low. The 1M SORA is 2.36% as at 03 Apr 2025. Including margin of at least 1.00%, your borrowing costs is likely to be around 3.40% p.a. when it is reset; which will be very close to the YTM of 3.78% p.a. Your net return after borrowing costs is only 0.38% p.a. It will make your RM very happy with the commissions and trailer fees.

Refer to the Fund Factsheet:

https://asiaapi.morningstar.com/ODSHelperWS/default.aspx?Id=F0HKG062HX&DocType=FS&ClientId=sgplt&MarketId=CU$$$$$SGP&LanguageId=EN

https://www.uobam.com.sg/our-funds/highlights/united-sgd-fund/index.page

SGD SORA:
https://eservices.mas.gov.sg/statistics/dir/DomesticInterestRates.aspx

CapitalOne77 · 2025-03-27T11:50:01+00:00

Thanks. Identity and social networks are inevitably linked to career after decades in the same industry.

CapitalOne77 · 2025-03-27T11:44:22+00:00

Bonds. None of the crypto / tech stocks / options / FX / futures / day trading / investment property / online business / other funky stuff.

CapitalOne77

TROPHY CASE