FIIG - The Fixed Income Experts

Get to know Corporate Bonds

The fixed income asset class covers a range of investment options, such as corporate bonds and term deposits. Corporate bonds offer the potential to earn better returns than cash, predictable income, capital preservation and portfolio diversification.

The Benefits of Corporate Bonds

Earn a better return

Corporate Bonds generally pay a higher income return than cash and term deposits.

 

 

 

Source: Gross returns for 10 years to December 2017- ASX 2018 Long-term Investing Report July 2018.

Earn a better return

Predictable income

Corporate bonds provide a regular income stream through interest payments.

Predictable Income

Capital preservation

Corporate bonds are a lower risk investment than shares in the same company because your principal must be repaid when the bond matures.

Capital Preservation

Diversify your portfolio

Diversifying your investments across different asset classes and markets is an important way to protect your wealth from the impact of market changes, interest rates, currency fluctuations and inflation.

Through bonds, you can also invest in assets that would otherwise be out of reach.

Diversify your portfolio

How bonds work

Companies and governments issues bonds as a way of raising funds. They borrow funds from investors in the form of bonds, making it a form of debt.  When you purchase a bond, the bond issuer is legally obliged to pay you regular interest and at the bond’s maturity pay back to you the face value of the bond.

This provides investors a greater deal of certainty, as you are paid interest income, and your capital should be returned at maturity.

How to invest in Corporate Bonds

You can invest directly in Corporate Bonds through FIIG. It’s accessible, straightforward and transparent. There are two options, depending on how much time you want to spend thinking about your choice of Corporate Bonds.

  1. DirectBonds

    Our DirectBonds services enables you to build a personalised Corporate Bond portfolio to suit your investment goals. Choose from over 400 bonds, from $10,000 per bond with a minimum portfolio balance of $250,000.

  2. Managed Income Portfolio Service (MIPS)
  3. If you want direct access to the Corporate Bond market but don’t have the time or expertise to make these decisions, MIPS combines the benefits of owning Corporate Bonds directly with the services of a professional portfolio management team.  You still directly own your Corporate Bonds but FIIG constructs and manages the portfolio to match your investment goals and risk appetite.

Frequently asked questions

Bonds are issued by many companies – from well known companies such as BHP, Qantas and Commonwealth Bank to smaller companies such as G8 Education and Praeco.

Over 400 bonds are available via FIIG’s DirectBonds Service. Wholesale qualified investors can also invest in foreign currency denominated bonds, including USD, GBP and Euro bonds.

When you purchase shares in a company, you become a part owner of that company and there’s no certainty of income via dividends. With corporate bonds, you lend money to the company that issues the bond and it is legally required to pay you regular interest and repay the face value of the bond when the bond matures. This means that investing in a company’s bond is a lower risk than owning its equity or shares.

Another major difference between shares and bonds is that shares are generally traded on an open exchange such as the ASX, whereas the majority of corporate bonds are traded on the Over the Counter market.

Australian bonds have outperformed cash and Australian shares in the 10 years to December 2015:

Better returns

Source: Gross returns for 10 years to December 2015, ASX 2016 Long term Investing Report May 2016.

Face value is the initial capital value of the corporate bond and the amount repaid to the bondholder at maturity. The face value of a corporate bond is set at the time of issue and is usually $100.

Bond Portfolios

3.29% p.a.

Conservative Portfolio

Returns since the 29th of June 2018 are 8.71%. This portfolio has 13 securities with all weightings between 4.7% and 11.5%, yielding 3.29% pa. It is designed for investors wanting a 100% allocation of investment grade bonds. The returns shown are based on a $1 million investment. $250,000 is the minimum amount that can be invested with FIIG.

4.62% p.a.

Balanced Portfolio

Returns since the 29th of June 2018 are 8.59%. This portfolio has 23 securities with weightings between 2.7% and 8.3%, yielding 4.62% pa. It is designed for investors wanting a balanced allocation of investment grade and sub investment grade bonds. The returns shown are based on a $1 million investment. $250,000 is the minimum amount that can be invested with FIIG.

5.95% p.a.

High Yield

Returns since the 29th of June 2018 are 12.19%. This portfolio has 21 securities with weightings between 1.9% and 18.5%, yielding 5.95% pa. It is designed for investors seeking a higher return and who are comfortable with a corresponding increase in credit risk. The returns shown are based on a $1.5 million investment. $250,000 is the minimum amount that can be invested with FIIG.

Bonds available through FIIG

Choose from 113 bonds that pay over 6% returns

Coupon type
Fixed Coupon Bond
Price
$99.47
Sector
Finance
Maturity
Mar 2047
6.21%
Yield to maturity
Coupon type
Fixed Coupon Bond
Price
$104.25
Sector
Other Corporate
Maturity
Aug 2022
6.31%
Yield to maturity
Coupon type
Fixed Coupon Bond
Price
$105.68
Sector
Other Corporate
Maturity
May 2023
6.54%
Yield to maturity

Coupon type
Fixed Coupon Bond
Price
$105.00
Sector
Technology
Maturity
Apr 2038

6.05%
Yield to maturity
Coupon type
Floating Rate Note
Price
$104.88
Sector
Finance
Maturity
Jan 2049
7.55%
Yield to maturity
View all bonds

Choose from 67 bonds that pay 5% returns

Coupon type
Fixed Coupon Bond
Price
$104.25
Sector
Consumer
Maturity
Jun 2022
5.97%
Yield to maturity
Coupon type
Fixed Coupon Bond
Price
$103.18
Sector
Industrial
Maturity
Jun 2021
5.72%
Yield to maturity
Coupon type
Fixed Coupon Bond
Price
$115.28
Sector
Finance
Maturity
May 2036
5.05%
Yield to maturity
Coupon type
Fixed Coupon Bond
Price
$99.53
Sector
Industrial
Maturity
Nov 2028
5.26%
Yield to maturity
Coupon type
Fixed Coupon Bond
Price
$102.00
Sector
Finance
Maturity
Jun 2025
5.21%
Yield to maturity
View all bonds

Choose from 422 bonds that pay upto 5% returns

Coupon type
Floating Rate Note
Price
$101.11
Sector
Finance
Maturity
Aug 2025
5.04%
Yield to maturity
Coupon type
Fixed Coupon Bond
Price
$100.80
Sector
Utilities
Maturity
Feb 2043
4.32%
Yield to maturity
Coupon type
Fixed Coupon Bond
Price
$110.34
Sector
Finance
Maturity
Jun 2046
4.96%
Yield to maturity
Coupon type
Floating Rate Note
Price
$78.58
Sector
Finance
Maturity
Aug 2036
4.45%
Yield to maturity
Coupon type
Floating Rate Note
Price
$100.81
Sector
Consumer
Maturity
Jun 2044
2.96%
Yield to maturity
View all bonds 

^ Pricing as at 01 August. Subject to change. The yields and prices do not represent the prices that FIIG will transact with its clients. They simply represent FIIG's observation of the institutional market mid-point prices which are obtained from FIIG's trading with institutional counterparties, as well as numerous market data sources that FIIG has access to. A mid-point value sits between the typical bid (offer to buy) and ask (offer to sell) prices prevailing in the institutional market.

Bonds available through FIIG

Choose from 500+ bonds
Coupon type
Fixed Coupon Bond
Price
$104.50
 Sector
Other Corporate
Maturity
Aug 2022
6.25%
Yield to maturity
Coupon type
Fixed Coupon Bond
Price
$103.63
 Sector
Consumer
Maturity
Jun 2022
6.23%
Yield to maturity
Coupon type
Fixed Coupon Bond
Price
$105.58
 Sector
Other Corporate
Maturity
May 2023
6.60%
Yield to maturity

Coupon type
Fixed Coupon Bond
Price
$105.50
 Sector
Technology
Maturity
Apr 2038

6.01%
Yield to maturity
Coupon type
Floating Rate Note
Price
$104.53
 Sector
Finance
Maturity
Jan 2049
7.67%
Yield to maturity
View all bonds

^ Pricing as at 09 July. Subject to change. The yields and prices do not represent the prices that FIIG will transact with its clients. They simply represent FIIG's observation of the institutional market mid-point prices which are obtained from FIIG's trading with institutional counterparties, as well as numerous market data sources that FIIG has access to. A mid-point value sits between the typical bid (offer to buy) and ask (offer to sell) prices prevailing in the institutional market.

For more information on Corporate Bonds 

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Talk to a relationship manager

Brad Sheehan - Director Corporate and Institutional Bianca Burt - Associate Director, Money Market Sales John Sheridan - Head of Private Clients NSW/ACT Mark Connors - Head of Private Client Solutions (QLD WA) Darryl Bruce - StateManager - WA  

Phone  Call us on 1800 01 01 81

...with offices based in Sydney, Brisbane, Melbourne and Perth





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

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* 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.