Lower return of recent Singapore Savings Bonds
Dear readers, in this post, I will share two important point about AUG 19 SAVINGS BONDS . Investors might know that the Aug 19 Singapore Savings Bonds is currently open for application.
Readers will know that the Aug 19 Savings Bonds give a 1.68% return for the first-year of holdings. And readers will know that the above return is humble since Jul 19 bonds offer 1.93% for first-year.
As such, I am not surprised in reading that investors are not as keen in recent Singapore Savings Bonds due to alternative higher bank returns.
I believe investors should instead be offered a higher first-year return for AUG 19 SAVINGS BONDS in view of the above.
Notwithstanding the first-year return, I want to highlight the below.
Two Important Points:
First, on a ten-year holding basis, investors still get a decent 2.01% average annual return from Aug 19 bonds. Of course, the above returns is still lower than the 2.16% of the same of Jul 2019 Savings Bonds. I encourage long-term investors take note of the longer-term average annual returns. Long-term investors could then decide on their interest.
Second, I feel that the pool of investments in Aug 19 Bonds should remain in place for a longer period. As the above investments would come from long-term investors. The markets will then know the fraction of the bonds investors are long-term investors. I feel the above is a useful information. I believe the Aug 19 bonds will be useful in the above regard.
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