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Bonds winning over fans on rising yields but experts warn against over-exuberance

Tan Nai Lun

Tan Nai Lun

Published Thu, Oct 20, 2022 · 05:50 AM
    • Although interest rates have risen significantly on an absolute basis, investors should also take into account relative return.
    • Although interest rates have risen significantly on an absolute basis, investors should also take into account relative return. PHOTO: YEN MENG JIIN, BT

    BONDS may be a good addition to investing portfolios as interest rates and inflation are on the rise, but industry experts advise that investors keep to a balanced allocation in order to mitigate risks.

    Monthly demand for government-backed fixed income instruments – Singapore Savings Bonds (SSBs), Singapore Government Securities Bonds (SGS Bonds) and Treasury Bills (T-Bills) – have soared alongside yields.

    Total bid values at the latest T-Bill auctions came in at more than double the amount on offer, and subscription rates for the latest tranche of SSBs also exceeded the amount available.

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