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Learning, Sharing, and Teaching => Investor Alley => Topic started by: tooptoop4 on November 22, 2014, 04:27:15 AM

Title: Australian investor - Cash or Bonds?
Post by: tooptoop4 on November 22, 2014, 04:27:15 AM

I often here that bonds are useful for keeping a slice of a portfolio as non-volatile but for an Australian investor is there any use in holding bonds? From what I've read bonds deliver approx a ~2% yield (and no capital guarantee) but $AUD at-call/instant withdraw cash accounts such as ING (which are backed by the Govt for deposits up to $250k in case of bank failure) deliver a 4% yield with a capital guarantee

Title: Re: Australian investor - Cash or Bonds?
Post by: marty998 on November 22, 2014, 05:35:27 AM

Yes - partly the reason why Australia doesn't have a well developed bond market is the fact you can get a better risk/reward return from bank deposits.

That, and the preferential tax treatment of fully franked dividends.