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Thread: BOND THREAD

  1. #2631
    Junior

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    Default Re: BOND THREAD

    The top Five "black hearted" hedge fund heads made more than $1.5billions EACH EACH in 2019 at the expense of millions millions of the ordinary investors. I always tell my friends never never park money at HEDGE FUND. They are very evil

    Pimco income bond fund (SGD) was recommended by CS in 2014. Dividend yield around 4% (not guarantee) . LTV 70%. I did not buy as I prefer to buy individual corp bond. It was always around $10. My friend bought this fund with leveraging thinking it is a safe investment grade bond fund. With 100k cash on hand. He borrowed another 240k . Total 340k. He rec'd only $600/mth dividend after deducting the borrowing cost. Just 1 mth+ ago, it suddenly it drop from $10 to $8+. He got to top up a few time due to margin call. His NAV 340k has dropped to $240k (drop 100k) just within weeks. If he will to sell all units. He will get back only 40k cash. I total him to sell either 50% or 70% or all units. The best is to sell all units which it is a very difficult decision for him. Too painful to cut at huge loss. I told him many many times to put more in CPF but he was confident that he can beat CPF 2.5% return. Will he learn ? I don't think so.

    In 2017, I want to reprice my HDB loan with the banker. When everything is settle. He recommended me a Eastspring income fund. Dividend around 4%+. Again I am not interested. Days later, I came back to sign the document. While waiting, I saw the banker talking to an old uncle to invest in Eastspring income fund instead of FD. I hope he did not invest. Price was 94 in 2017. Now it was 0.8.

    I came to know about this fund when I unintentionally open by eldest brother (62) letter 4 yrs ago. He did invest into Eastspring income fund base his bank statement. In early 2018, I told him to sell all & move to CPF life as the interest 4% is guarantee by the govt. He cannot afford take risk as he is in the retirement mode. 4% guarantee by govt is so much better than non guarantee 4% return by eastspring income fund with potential fund dropping also . Luckily, he took my advise to sell away in 2018 & move to CPF life.

    JPM morgan Global income fund , fidelity income fund. All drop >15% within weeks. My friends also got hit. Luckily no leveraging. Just 15% to 20% loss within weeks.

  2. #2632
    Junior

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    Default Re: BOND THREAD

    Quote Originally Posted by cbsh38584 View Post
    The top Five "black hearted" hedge fund heads made more than $1.5billions EACH EACH in 2019 at the expense of millions millions of the ordinary investors. I always tell my friends never never park money at HEDGE FUND. They are very evil

    Pimco income bond fund (SGD) was recommended by CS in 2014. Dividend yield around 4% (not guarantee) . LTV 70%. I did not buy as I prefer to buy individual corp bond. It was always around $10. My friend bought this fund with leveraging thinking it is a safe investment grade bond fund. With 100k cash on hand. He borrowed another 240k . Total 340k. He rec'd only $600/mth dividend after deducting the borrowing cost. Just 1 mth+ ago, it suddenly it drop from $10 to $8+. He got to top up a few time due to margin call. His NAV 340k has dropped to $240k (drop 100k) just within weeks. If he will to sell all units. He will get back only 40k cash. I total him to sell either 50% or 70% or all units. The best is to sell all units which it is a very difficult decision for him. Too painful to cut at huge loss. I told him many many times to put more in CPF but he was confident that he can beat CPF 2.5% return. Will he learn ? I don't think so.

    In 2017, I want to reprice my HDB loan with the banker. When everything is settle. He recommended me a Eastspring income fund. Dividend around 4%+. Again I am not interested. Days later, I came back to sign the document. While waiting, I saw the banker talking to an old uncle to invest in Eastspring income fund instead of FD. I hope he did not invest. Price was 94 in 2017. Now it was 0.8.

    I came to know about this fund when I unintentionally open by eldest brother (62) letter 4 yrs ago. He did invest into Eastspring income fund base his bank statement. In early 2018, I told him to sell all & move to CPF life as the interest 4% is guarantee by the govt. He cannot afford take risk as he is in the retirement mode. 4% guarantee by govt is so much better than non guarantee 4% return by eastspring income fund with potential fund dropping also . Luckily, he took my advise to sell away in 2018 & move to CPF life.

    JPM morgan Global income fund , fidelity income fund. All drop >15% within weeks. My friends also got hit. Luckily no leveraging. Just 15% to 20% loss within weeks.
    Only My lady friend bought Fidelity income from big local bank with leveraging . With cash 500k & borrow another 500k. That was I think 2014 or 2015. I told her fund can drop very fast & may trigger margin call very fast if it happen. Anyway, she should be ok as she did make at least $2m from enbloc.

  3. #2633
    Junior

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    Default Re: BOND THREAD

    I have been "Advised" to buy many bonds / funds... like the following

    Hyflux. : by DBS, around 6%
    Swiber : by DBS, around 6%
    Mortgage bond : around 6%
    Coco bonds
    etc

    Other than Coco Bond I mentioned in my earlier post. I would like to share what is mortgage bond.

    Banks repackaged their mortgage loans given to borrowers (like businesses and individuals) into bonds and sell to their retail investors in the form of mortgage bond and giving them leverage of 60-70%.

    Therefore banks transfer their credit risk to the bond buyers and yet earn the management fee of 1.5% and income on the leverage.

    Now, there is very heavy redemption of the mortgage bond. The whole problem is, the bond sellers have no right to sell the underlying properties. So, the bond buyers get margin calls for their leverage.. and redeem and yet the fund manager has no cash to redeem as they can't sell the underlying .. So what will be next....ask the US government to help...

    The risk in the credit market is not over yet.

    What will be next after the US$2tn... nothing substantial can be offered already and US is going to be the top of the Covid-19 very very soon...perhaps next week...

    Initial jobless claim will also cross million very soon...
    Last edited by Laguna; 26-03-20 at 16:55.

  4. #2634
    Newbie

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    Default Re: BOND THREAD

    Hi, any idea why fraser retail bond 3.65% drop so much? Other retail bond /astrea bond doesn’t drop as much. Tia

  5. #2635
    Newbie

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    Default Re: BOND THREAD

    Laguna, re your post on mtge bonds, if you are referring to US mortgages, I saw an article which was very good in explaining how their system works and how in the current mkt there will be a lot of issues, including:
    1. the originators of the loans typically take around 3 years to cover cost - after that it's mostly profits
    2. when int rates drop so much as they did the last month, customers will refinance - this means some / many of the loans are loss-making for originators
    3. they are still responsible for paying their counterparties even though they have "sold" the mortgages

    God knows who (i.e. which banks / funds) are holding onto these...

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