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Which fund is better and at what price to buy?

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  1. #21

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    I should add, that there are others on this forum who know a lot more about bonds and bond funds than I do so please feel free to point out where I've got it wrong.


  2. #22

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    I like to move my funds to bonds...or something stable due to the US trade war. Which are the ones good to have a look at? Thanks


  3. #23
    bdw
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    Quote Originally Posted by shri
    @bdw - just looked up the pricing on that fund you mentioned. Are you still holding it?
    Do you mean Allianz income and growth? Yes I am holding that, along with 7 or 8 others. But I hedged it into AUD version. This one pays dividend around 8%-9% per month, but lost value over last 12 months, so total return over last year has been 1.91%. Not great, but haven't lost anything either.
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  4. #24
    bdw
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    Quote Originally Posted by wanda siu
    I plan to buy Templeton Global Total Return Fund. Is it worthwhile to buy? Please advice.
    Yes, I think now is a good time to buy Templeton Global Total Return Fund. This is a bond fund. It plummeted in August at the same time as the Argentinian Peso crisis (the peso collapsed 35% against USD in August). 5% of this Templeton fund is currently invested in Argentina. Now I hear the crisis largely over, and the fund is restructuring to focus on other European regions, so if you believe my Standard Chartered relationship manager now is a good time to buy it!!
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  5. #25

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    I don't know how to value bond investment at this juncture... just count how much of the world bonds are actually yielding negative interest rate.. then you know how bad the global scenario is..

    we can make the assumption 1. interest rate continue to fall, favoring bonds, then we are talking about pretty much every bond in the world will be at negative rate in 3/5/8 years.. 2. interest rate flips and start going up, then bonds are screwed especially the longer dated ones, or the high yields that would really get impact due to worsening credit quality..

    the only thing i can say, as a bond issuer myself (my job), i would definitely not buy my own bonds.. the quality is good, but the yield is just so ridiculously low...
    with the curve currently inverted, be abit more hardworking source around for bank deposits, you can probably get good deals for 1/2 years... instead of locking in similar yield for 5-7 years with added risk and not much added yield.

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  6. #26

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    Dear all,

    Thank you for your expert advice. I appreciate it very much!
    I plan to buy allianze income and growth CAD version and Templeton global total return fund AUD version. That is, I will sell the emirates bond with 2.97 yield to maturity and invest in Templeton.
    Besides, I am holding PIMCO, American income portfolio and Templeton global total return fund EUR version. Is it wise to switch the investment from the Emirates bond to Templeton bond fund? Please advise.


  7. #27

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    @wanda siu - why are you playing around with so many currencies? You take a tiny loss every time you switch currencies.

    In your last post you mentioned CAD, USD, EUR and AUD.

    Once you factor in currency conversion charges (I suspect you're not going through advanced levels of FX switching through transferwise / instarem etc) at your bank and then buying (paying a MIN 0.5% sales charge + 1.5% or so annual fee on the fund) you'll see that it does not make sense to 1) switch 2) continue switching

    Perhaps you should consider just putting money into a USD denominated bond ETF - less glamorous, but fewer charges?
    @traineeinvestor - you're spot on with your post. There are a lot of derivatives being used in that funds.

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  8. #28

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    Quote Originally Posted by freeier
    i would definitely not buy my own bonds..
    One of my previous bosses used to tell me: Jr, don't get high on your own supply
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  9. #29
    bdw
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    I buy funds in AUD and HKD because these are the two currencies all my assets/liabilities/income/expenses are denominated in. But shri is right, switching fees are usually around 1%, and fx spread on top of that. I switched one of my funds once but generally buy to hold and dont plan to keep buying/selling/switching much. Buying fees are also 1%, but no selling fees.

    So I also question why wanda is buying so many currencies, are you just gambling on fx rates? I have a local mate also buying AUD funds now simply because AUD is weak and then hopes to switch them back to HKD in the future when it goes back up again. There is a 1% switching fee + fx spread, but if AUD rises more than 1% he will make a profit overall.

    I buy funds rather than basic shares/ETF's/REIT's etc because this gives me the 60%-70% LTV ratio for overdraft facility. So if I buy HK$1m in funds, I can get an overdraft for $700,000 in 11 different currencies at rates from 1% for JPY/EUR up to around 3.5% for SGD. Right now I am borrowing a lot of JPY which is quite strong, then converting it to AUD which is quite weak. By doing this,, I hope to take advantage of favourable fx conditions, as well as the lower 1% I can borrow for in JPY vs around 4% in Australia.

    Having said above, I don't only buy funds. I also buy basic shares, ETF's, REIT's as well. I also own property and have rental income in diferent countries. Funds are just one of many investment tools available. Some people dont like them because they have upfront fees around 1% to purchase, and then hidden fees around 1.5% per year. But I still have some because of the overdraft LTV they provide. But I don't go too overboard with them.

    jrkob, shri and traineeinvestor like this.

  10. #30

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    Quote Originally Posted by bdw
    I buy funds in AUD and HKD because these are the two currencies all my assets/liabilities/income/expenses are denominated in. But shri is right, switching fees are usually around 1%, and fx spread on top of that. I switched one of my funds once but generally buy to hold and dont plan to keep buying/selling/switching much. Buying fees are also 1%, but no selling fees.

    So I also question why wanda is buying so many currencies, are you just gambling on fx rates? I have a local mate also buying AUD funds now simply because AUD is weak and then hopes to switch them back to HKD in the future when it goes back up again. There is a 1% switching fee + fx spread, but if AUD rises more than 1% he will make a profit overall.

    I buy funds rather than basic shares/ETF's/REIT's etc because this gives me the 60%-70% LTV ratio for overdraft facility. So if I buy HK$1m in funds, I can get an overdraft for $700,000 in 11 different currencies at rates from 1% for JPY/EUR up to around 3.5% for SGD. Right now I am borrowing a lot of JPY which is quite strong, then converting it to AUD which is quite weak. By doing this,, I hope to take advantage of favourable fx conditions, as well as the lower 1% I can borrow for in JPY vs around 4% in Australia.

    Having said above, I don't only buy funds. I also buy basic shares, ETF's, REIT's as well. I also own property and have rental income in diferent countries. Funds are just one of many investment tools available. Some people dont like them because they have upfront fees around 1% to purchase, and then hidden fees around 1.5% per year. But I still have some because of the overdraft LTV they provide. But I don't go too overboard with them.
    Having assets which the bank will lend against at relatively good interest rates without having to go through the hassle of applying for a new loan with the associated delays and paperwork is a big plus for me as well.
    bdw likes this.

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