Investing in Exchange Traded Bonds - Aussie Stock Forums

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  1. #1

    Default Investing in Exchange Traded Bonds

    Hi guys,

    I am hoping to ask for some newbie advice. I want to preserve my capital and earn a decent interest rate and my research lead me to this http://australiangovernmentbonds.gov.../list-of-etbs/

    Here are my questions:

    1) I have a bank account at NAB. If I open a Securities account with them, I can just buy these bonds through their online trading platform, right? Does anyone know a cheaper way to buy them

    2) Once I buy bonds (say) this one
    15 April 2015 6.25% GSBG15 15 October 2013 312.5 76KB 899KB

    then, I just have to hold on to it until 15 April 2015 to get my principal back (without risk) and I will get 6.25% coupon payments, right?

    3) I read also that there is no withholding tax for non residents (I don't live in Aus), so essentially, this is a low risk investment yielding 6.25%, right?

    Would welcome any suggestions on which platform to use or if there are other suggestions than buying ETBs. I don't want to risk my principal so I don't want to go the stock route. Time frame for my investment is 3 years.

    Thank you

  2. #2

    Default Re: Investing in Exchange Traded Bonds

    I suggest you read up on 'yield to maturity' to get a better picture of the return you will get if you hold the bond until 15 April 2015.
    On the ASX website, it should have the definition and YTM amount

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