Singapore government or corporate bonds

[neonlight]

Hi,

Does anyone here have experience buying bonds in Singapore? I like to try buying some due to the strong credit rating. Bond ETF is my preferred choice as I can load and offload easily.

I am looking at ABF Singapore Bond Index Fund, I am surprised that they only have slightly over 500M USD in AUM, given that they are one of the biggest ETF bonds. It’s recent dividend yield was 2.3% and the expense ratio is 0.25%.

Just starting out the research and advice appreciated

[neonlight]

Any takers

[Andy R]

I'd post this over at the non-US sub-forum of bogleheads.
They have some helpful posters and useful information in their discussions around this.

I would not use a corporate bond fund. The purpose (for me) is safety, and corporate bonds tend to go down with equities in a crash, defeating the purpose of it. I use equities for growth and higher quality bonds for stability.

If the Singaporean government is stable and unlikely to default (like many countries did during the Asian crisis, and like Italy is look to have a fair chance of now), then SGD government bond might be ok. Otherwise it might make more sense to just get the closest thing to a global proxy from the Irish domiciled funds like AGGG (global bonds unhedged) or AGGU (global bonds hedged to USD).

[neonlight]

I'd post this over at the non-US sub-forum of bogleheads.
They have some helpful posters and useful information in their discussions around this.

I would not use a corporate bond fund. The purpose (for me) is safety, and corporate bonds tend to go down with equities in a crash, defeating the purpose of it. I use equities for growth and higher quality bonds for stability.

If the Singaporean government is stable and unlikely to default (like many countries did during the Asian crisis, and like Italy is look to have a fair chance of now), then SGD government bond might be ok. Otherwise it might make more sense to just get the closest thing to a global proxy from the Irish domiciled funds like AGGG (global bonds unhedged) or AGGU (global bonds hedged to USD).

I absolutely agree with your observation of corporate bond funds, which might bottoms up in the event of stock market crash.

Thanks for suggesting the Irish domiciled funds - I am trying to open an expat bank account in an European offshore banking and they are likely to have these offerings.

[mickeyj]

Coming from a Singaporean's perspective, this bond looks super safe.

Looking at the indicative holdings, most of the bonds are all from government agencies and none of them are likely to default.

Our government is continues to be AAA credit rated by institutions and the government has a strong reserve of funds to fall back on if anything goes wrong. In the Asian Financial Crisis and Global Financial Crisis, the government tapped on its reserves to pump funds into the market to help businesses and its citizens. I think Singapore also recovered faster than our neighboring countries.

I think you can find online resources about the above easily.

Btw, we also don't have any tax on capital gains and dividends. :)

[Andy R]

Coming from a Singaporean's perspective, this bond looks super safe.

Looking at the indicative holdings, most of the bonds are all from government agencies and none of them are likely to default.

Our government is continues to be AAA credit rated by institutions and the government has a strong reserve of funds to fall back on if anything goes wrong. In the Asian Financial Crisis and Global Financial Crisis, the government tapped on its reserves to pump funds into the market to help businesses and its citizens. I think Singapore also recovered faster than our neighboring countries.

I think you can find online resources about the above easily.

Btw, we also don't have any tax on capital gains and dividends. :)

Very interesting, thanks for sharing.
As an expat that moved to Thailand, and with the massive corruption in Thailand, I can't bring myself to bring money into the country, but the THB vs SGD has been incredibly stable for the last 20 years, so I wonder if a SGD bond would be a good choice over a global unhedged bond fund.
If the currency and government are as stable as Australia, it looks like it would be an excellent choice for someone in my situation.

[neonlight]

Coming from a Singaporean's perspective, this bond looks super safe.

Looking at the indicative holdings, most of the bonds are all from government agencies and none of them are likely to default.

Our government is continues to be AAA credit rated by institutions and the government has a strong reserve of funds to fall back on if anything goes wrong. In the Asian Financial Crisis and Global Financial Crisis, the government tapped on its reserves to pump funds into the market to help businesses and its citizens. I think Singapore also recovered faster than our neighboring countries.

I think you can find online resources about the above easily.

Btw, we also don't have any tax on capital gains and dividends. :)

Very interesting, thanks for sharing.
As an expat that moved to Thailand, and with the massive corruption in Thailand, I can't bring myself to bring money into the country, but the THB vs SGD has been incredibly stable for the last 20 years, so I wonder if a SGD bond would be a good choice over a global unhedged bond fund.
If the currency and government are as stable as Australia, it looks like it would be an excellent choice for someone in my situation.

I did a quick check, you are right that THBSGD pair is increasing stable, most other regional currency lost out to SGD horribly.