FIIG - The Fixed Income Experts

Corporate Bonds in 2018 Australia's growing appetite for Bonds

Download the full Deloitte report
How the Corporate Bond market is set to almost double in the next 12 months

How the Corporate Bond market is set to almost double in the next 12 months

Why the Corporate Bond market has grown by over 40% since 2010

Why the Corporate Bond market has grown by over 40% since 2010

Insights into the huge opportunity for Australian Investors, with only 16% of high net worth individuals currently investing in Corporate Bonds

Insights into the huge opportunity for Australian Investors, with only 16% of high net worth individuals currently investing in Corporate Bonds

The Australian Corporate Bond market is growing

Recent research from Deloitte Access Economics revealed that Australia's corporate bond market is growing, representing a large opportunty for high net worth individuals. Despite this, it is not currently given the attention of other investment options in Australia.

In Australia, the Corporate Bond market has grown by more than 40% since 2010

The market is around 70% the size of the listed share market (ASX), and there are currently over $1 trillion of Australian corporate bonds outstanding.

Deloitte Corporate Bond ReportTotal corporate bonds outstanding as at the end of the year, 1988 to 2016
Gross annual returns between 2006 and 2016 for selected asset classes

Average gross annual return for Australian bonds is higher than for Australian shares

The growth potential for bond investments is huge: average gross annual return for Australian bonds was 6.2% between 2006-16, compared to 4.0% for Australian shares.

Those who already invest in corporate bonds intend to increase their investments in the coming year

Research showed that 86% of corporate bond investors have had a positive experience, and a net 37% intend to invest more in the next 12 months.

Of those who don't yet invest in corporate bonds, a net 15% intend to over the next 12 months, meaning the share of high net worth individuals owning corporate bonds could grow from 16% to 29%.

Why do people invest in corporate bonds?

Individuals who invest in corporate bonds cite the following as the top reasons:

A reliable income stream
A reliable income stream

The level of return given the risk profile
The level of return given the risk profile

Portfolio diversification
Portfolio diversification

Capital Preservation
Capital Preservation

Corporate investors cite similar reasons for holding corporate bonds.

Download the full Deloitte report

Why there's huge opportunity for Australian investors

Despite high returns and the huge available market, current investment in bonds is much lower than other asset classes in Australia.

Only 16% of high net worth individuals in Australia directly own corporate bonds

Only 16% of high net worth individuals in Australia directly own corporate bonds

Only 47% of the corporate bond market is owned by Australian investors

Only 47% of the corporate bond market is owned by Australian investors, and private investors hold less than 1% of all corporate bonds on issue in Australia (compared to almost 20% in the United States).

Corporate bonds are 11% of total portfolio assets for individuals with direct holdings

Corporate bonds are 11% of total portfolio assets for individuals with direct holdings

OECD Countries' pension fund asset allocations in bonds and bills, 2016

John O'Mahony - Deloitte Access Economics Partner

Direct investment in the fixed income asset class such as corporate bonds remains underdeveloped in Australia compared to other developed countries.

John O'Mahony
Deloitte Access Economics Partner

Learn more in Deloitte's Corporate Bond Report 2018

  • The latest trends in Australia's corporate bond market
  • What's driving investor and issuer activity What's holding back market participation
  • Why the Australian bond market is well positioned for further development over the coming years

Your access to the full report

Fill in the form below to get these insights and more in the full Deloitte Corporate Bond Report 2018

Deloitte Corporate Bond Report 2018

Earn over 6% pa* with Corporate Bonds. Get started today!

Open an account

Copyright © 2019 FIIG Securities Limited | ABN 68 085 661 632 | AFSL No 224659 | Financial Services GuideSitemap | About us
FIIG provides general financial product advice only.  For a copy of our disclaimer please refer to fiig.com.au/disclaimer
* Based on FIIG’s high yield sample portfolio. Click here to view. Subject to change and before fees. Please see our FSG for any applicable fees.