The U.S. Federal Reserve has been raising interest rates this year, which has hit the prices of different assets, and only bonds with fixed interest are "hard".
As the central bank raised interest rates, major banks also raised the interest rate of time deposits to collect funds. The latest one-year fixed interest rate has reached as high as 5%.
However, the government inflation-linked bonds are also close to risk-free. With the obvious discount of second-hand bond prices, even if the minimum guaranteed minimum interest rate is only 2%, the actual yield to maturity is as high as 5% or more, which is not inferior to fixed deposits.
There is still less than a week before the Fed's interest rate meeting. As the interest rate continues to rise, the one-month interest rate has exceeded 3%, and the one-year interest rate has reached as high as 5.2%.
The cost of inter-bank lending is high, so major local banks have raised fixed deposit interest rates in recent months, scrambling to "grab money" from the public.
Bank of China Hong Kong, one of the note-issuing banks, has recently raised the interest rate of Hong Kong dollar and US dollar time deposits significantly. Among them, the one-year fixed deposit interest rate has been increased to 4%. It surpassed Standard Chartered Bank and became the highest among the four major banks.
While large banks are also actively "grabbing money", small and medium-sized banks are even more aggressive.
Overseas Chinese Wing Hang recently raised the one-year Hong Kong dollar time deposit interest rate by 1% to 5%, surpassing Fubon's 4.6% and becoming the highest in Hong Kong.
The starting deposit amount is 200,000 yuan. Based on this calculation, the interest of 10,000 yuan can be secured in one year.
However, in order to obtain this time deposit discount, you must first become a Grand Wealth Wealth Management customer with assets of 1 million or more.
The Hong Kong government has issued several inflation-linked bonds (iBonds) in the past, all with guaranteed minimum interest rates.
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Over 5% of iBond YTM due next year
At a time when investment sentiment is pessimistic, many people want to park their funds in safe havens, in addition to time deposits, or pay attention to government-issued bonds.
The Hong Kong government has issued a number of inflation-linked bonds (iBonds) in the past, and this year issued its first green retail bond (yield is also linked to inflation), which is similar to the regular comparison risk of banks.
There are 3 types of government bonds that have not yet expired and can be traded in the secondary market. They are inflation-linked bonds due in 2023 (4239), with a guaranteed minimum interest rate of 2% and 3 dividend payment dates remaining; those due in 2024 Inflation-linked bonds (4246), with a guaranteed minimum rate of 2%, and 4 dividend payout days remaining; green retail bonds due in 2025 (4252), with a guaranteed minimum rate of 3%, with no interest paid yet, with 6 remaining dividend payouts day.
Among them, the government bond 2311 (4239), which is closest to the maturity date, is still 384 days away from the maturity date, and closed at 97.85 yuan on Friday.
During the period, there are still 3 interest payment days. According to the guaranteed minimum interest rate and 10,000 yuan per lot, the dividend is about 100 yuan each time, and the maturity yield is about 5%.
In other words, investors who buy first-hand government bonds 2311 cost about 9,785 yuan and receive 100 yuan of interest on each interest payment date. When the bond matures next year, they will get back 10,000 yuan of face value, together with 300 yuan of interest, which means that the actual The return is 515 yuan or 5.15%.
It should be noted that if the due date is not a business day in Hong Kong, the government will repay the principal on the next business day in Hong Kong.
As for the government bond 2406 (4246), which has 4 interest payment dates, there are still 604 days to maturity due to the long time to maturity, and the yield to maturity on interest is only 4.99%.
It is worth noting that since the above algorithm is only calculated based on the guaranteed minimum interest rate, and the interest rates of the three bonds are all linked to inflation, if the local Composite Consumer Price Index (CPI) averages higher than 2% in the future, the return rate of the bonds may increase. high.
According to the latest figures from the Census and Statistics Department, the underlying inflation rate in Hong Kong in September this year was 1.8%.
Accredited financial planner Lin Chang Hang Seng Indexes, although individual bonds have higher returns than time deposits, investors should consider the transaction costs of buying and selling bonds.
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Lin Chang, president of the Family Financial Education Society and an accredited financial planner, said that in terms of interest income, the return of investing in individual second-hand government bonds is indeed higher than that of many banks' time deposit rates. Especially in the interest rate hike cycle, the return of short-term bonds is relatively high. high.
In addition, the advantage of investing in second-hand government bonds is that there are multiple interest payment dates. Instead of paying interest in one lump sum after the maturity of the time deposit, even if the bonds are sold during the year, part of the interest may have been collected or offset the transaction costs. A handling fee will be charged when the time deposit is settled early, and there is a greater chance of "backward loss".
"Wealth Management Coach" Lin Changheng: Pay attention to transaction costs and transaction volume
However, Lin Changheng reminded that although the return of individual bonds is higher than that of time deposits, investors must consider the transaction costs of buying and selling bonds, including the purchase fee, the fee that may be sold before the maturity date, etc. If the purchase principal is less And being charged a certain fee, I am afraid that the gain outweighs the loss.
In addition, investors should also pay attention to whether the bond market transaction is sufficient. If there is not enough supply, it may be necessary to receive the bond at a higher market price, which will reduce the return.
Asked if the Federal Reserve's interest rate meeting next week will put further pressure on bond prices, allowing investors to get better returns.
Lin Changheng believes that although the United States is expected to raise interest rates by 75 basis points in November, the market has already expected that the interest rate hike cycle may end in the middle of next year, and bond prices often reflect market expectations, so bond prices may not fall further by then.
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