Evan Metcalf

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78 appearances 1 recordings 1 series first heard Jun 2022 last heard Jun 2022

Evan Metcalf’s voice in public audio — every appearance, attributed to the second.

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Australian Finance Podcast · Bonds 101: how to invest in bonds & what to look out for · 22 Jun 2022 podcast

So they can trade them easily.

They can access the bonds.

They can get a managed portfolio.

They don't need to be monitoring maturities and

income and excess cash and these sorts of things.

So there's a range of different advantages to investing through an ETF.

In terms of characteristics and what you should look for in a bond ETF, I guess they come in a few different sort of flavors.

I mentioned earlier around government bonds versus corporate bonds.

So there's government bond ETFs for particular countries.

There's government bond ETFs that are

global in nature and pull a whole lot of different countries together.

There are corporate bond ETFs that are at the higher end of the credit curve, so AAA type companies and the likes, so very credit worthy type companies.

There's bond ETFs for companies that are in more the high yield segment, so

below investment grade, which means that these companies are going to be yielding more so that you're actually taking a little bit more credit risk by investing in these companies.

So you get a little bit more in terms of the potential return, but you're taking a little bit additional risk and there's some potential that some elements of the portfolio can default.

And that's another real advantage of using ETFs as well.

If you have a large spread of different issuers in your portfolio rather than just one, then that default risk as well can be diversified away.

So an ETF is going to be tracking a benchmark index generally, unless it's an active ETF.

And benchmarking in the bond market is a bit different from the equity market.

So in the equity market, you have a company, it has shares, those shares are listed, and each company has one share.

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