Bond Funds for Conservative Investors

STRATEGIC INVESTMENTS:

Strategic Investments can be held for the long-term, i.e. for greater than 12-24 months. The investment case for these investments needs to be reviewed on a quarterly basis for next 12 month period. Ideally suited for retirement planning or long term investment planning.

Below list is pulled from the broader shortlist of funds.

USD FOCUS LIST: iShares Intermediate Credit Bond ETF , iShares Core U.S. Aggregate Bond ETF , iShares 1-3 Year Credit Bond ETF , Natixis Loomis Sayles Investment Grade Bond Fund

SGD FOCUS LIST: Currently Nil, for Conservative Investors

AUD FOCUS LIST: Russell Australian Select Corporate Bond ETF , iShares UBS Composite Bond ETF


 

MEDIUM-TERM INVESTMENTS:

Medium term investments are investments at attractive relative valuations with favorable outlook for next 6-12 months. The investment case for these needs to be reviewed on a monthly basis for next 6 month period. Hence more careful monitoring is required than strategic investments. Such investments are suitable for shorter term investment goals but may be used for longer term goals like retirement planning as well, with more careful monitoring.

Below list is pulled from the broader shortlist of funds.

USD FOCUS LIST: Currently Nil, for Conservative Investors

SGD FOCUS LIST: ABF Singapore Bond Index Fund

AUD FOCUS LIST: Currently Nil, for Conservative Investors


PERFORMANCE DATA:

conservative bond funds


USE OF LEVERAGE:

Leverage can enhance positive returns, while it can hurt more if investments post negative returns. Investors should take less leverage on more volatile investments like growth equities, convertible bonds and very long term bonds ; while safer investments like low volatility high dividend stocks and conventional bonds can be levered more as their price volatility is lower and hence risk of getting a margin call is lower.

Conservative Investors should not use any leverage.

Below is an illustration of leverage effect on ROE (Return on Equity):

leverage effect.png