Dear readers, as you may be aware, the public application for Astrea VI bond is now open and will close at 12pm on 16 March 2021. On first glance, what is attractive about Astrea VI bond is its 3% yield of per annum for at least five years or longer, for up to 10 years. In fact, I would say that this 3% annual yield not just the attractiveness of Astrea VI bond but is the raison d’etre of the bond that applicants are investing in. And this 3% annual dividend yield is all the more attractive since yields in other safe assets these days are generally low.
But wait! Before you rushing into investing into Astrea VI bond, think again. The total yield that investors in Astrea VI bond are looking at work out to 15%. But one must note that investing into Astrea VI bond is not really investing in a safe asset like conventional bond since it is really about investing into private equity funds not backed by any entities.
And not only that, there is also a high possibility that you will reap much more profit including capital and dividend yield if you invest in equity at the right time : when the stock markets is having a discount. Will you prefer to put $100,000 into Astrea VI bond to earn 15% over 5 years ($15,000) which is also not really a guarantee for the reasons provided above? Or will you think that in the next five years, there is a high chance that the great stock market meltdown since 2008/2009 will occur?
If a stock market financial meltdown occurs, you could invest in a safe equity like the STI ETF fund at low and discounted prices and likely earn more than 15% guaranteed capital gain as the stock market rebound from the lows. Not to mention, you will also get at least 3% dividend yield by just investing in the STI ETF alone.
ASTREA VI BOND: WILL YOU INVEST?
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