News

27th Mar

Investment Grade Opportunities for the Retail Investor via Exchange and BondMart

Former HSBC investment bankers Philip Gilbert and Michael Smith have teamed up with Linear Investments Ltd to launch BondMart, a portal designed to offer brokers, client advisers and discretionary managers access to retail bonds from a stable of investment grade issuers.  

Linear is acting as promoter of the bonds and has worked closely with London Stock Exchange to introduce new investment grade issuers to the Order Book for Retail Bonds (ORB)  

The launch marks an important new development for the retail bond market with the BondMart platform delivering a series of new issues from a number of global financial corporations suitable for retail investors with an issue price at par and initial offer periods of up to two weeks.  Historically, retail investors have had little or no access to these types of issues and BondMart expects to launch the first inflation-linked issue in the coming weeks. 

“We believe that BondMart will play an important role in helping to grow the overall market for retail bonds by offering retail investors the diversity and choice normally enjoyed only by institutional investors” –Phillip Gilbert

Philip Gilbert, Linear Investment said, “This is a breakthrough for retail investors. We believe that BondMart will play an important role in helping to grow the overall market for retail bonds by offering retail investors the diversity and choice normally enjoyed only by institutional investors.  The variety of investment grade issues from global financial corporations will also enable retail investors to build a diversified portfolio within this growing asset class. Initially, BondMart will be offering floating rates issues, a particular initial focus will be on inflation-linked bonds reflecting the demand shown by retail investors and distributors for these types of products”.

BondMart has already appointed a number of Authorised Distributors and brokers and financial advisers will be able to buy the bonds through this network. 

Retail Bond Expert believes that the opportunity for retail investors to construct a portfolio of investment grade bonds that is diverse in terms of both sector and geography represents a step change in the development of this exciting sector and will report upon developments as BondMart rolls out.   

Recent issues suggest that there is disparity between advised and self-directed clients in their purchasing patterns; Whereas rating and security understandably greatly influence the level of uptake by discretionary and advisory firms, self-directed investors appear much more attuned to the coupon on offer. 

As ever, RBE invites users to sign up and join the debate, and would particularly like to hear of the appetite from potential investors for investment grade bonds with the attendant reduction in guaranteed return.   

Philip Gilbert weighs up some of the issues to be considered by the retail investor in Inflation: The Biggest Threat to Your Bond Portfolio?  and would welcome any inquiries to  pgilbert@linearinvestment.com  or  :  +44 (0) 20 3603 9823 Further details are available at www.linearinvestment.com/linear/bondmart-landing-page 

Jullyan

Posted on 19/10/2013 23:16:51

I mostly agree with the first post. Interest rates uslulay start to rise when the economy is doing better. When the economy is doing better then the companies that sold the junk bonds generally are more secure so the interest rates for junk falls or stays the same. And the higher yield becomes more attractive. But that only works for a while. When Fed starts raising rates high enough to slow the economy then junk gets hurt more because they more risky and generally more in debt. To simplify they perform better at first and worse later because you are weighing two factors, interest rates against default risk.

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