to good questions
Which is better a bond or a share?
We think bonds are much better than shares, and here’s why:
- In the event a company goes into default, bondholders are paid in priority over shareholders.
- Bondholders receive set coupon payments. Company dividend payments are based on performance, so can rise and fall.
- In general, if you buy a bond at (or even below) its face value (i.e., value of the bond at maturity) and hold it to maturity, you will earn some yield and get your principal back.
- Bonds generally offer reliable returns so are better suited to investors wanting to diversify their portfolio to achieve risk-mitigated investment returns.
How safe is the money?
Your money is safeguarded via an independent third-party provider of custodial services. Australian Bond Exchange uses Perpetual Ltd to hold bonds on behalf of our clients. Perpetual is a trusted brand, operating since 1886.
Do bonds have a capital guarantee?
Generally speaking, there are very few financial products that are capital guaranteed. Corporate bonds don’t usually come with the guarantee of capital, however, unlike shareholders, bondholders have greater priorities and rights in the event of a company default. Part of our Product Approval Process is to assess the creditworthiness of our bond issuers.
What is the difference between shares and Australian Bond Exchange products?
Bonds are a way companies can issue debt and raise money, whereas shares allow investors to purchase an ownership stake in a company. Bonds can provide regular returns, and the value of shares is tied to the performance of a company. Most corporate bonds are traded over the wholesale Over the Counter (OTC) market and shares are traded on an open exchange such as the ASX.
At the Australian Bond Exchange, we have access to a wide range of bonds. Our experienced advisers can help you arrange the purchase and sale of bonds.
If I sell early, will I receive all my capital back?
How easy is settlement?
Settling your trades by Direct Debit is our preferred method to enable an easy, efficient, and seamless trading experience for you. You can update your details by completing this form. Direct Debit Application – Australian Bond Exchange
Do you have a high interest on call account?
We offer a high interest earning cash deposit account with no monthly fees and easy withdrawals available. A Retail Client Trust Account with the Australia and New Zealand Banking Group Limited (ABN 11 005 357 522). Retail Clients will earn interest on their daily cash balance. You can find out more details, including the current rate on this page. Cash Rate – Australian Bond Exchange
Is it a smarter option to go with a bond linked to the interest rate as opposed to a fixed return?
Does the value of my bond drop if the interest rates go up in
case I need to sell?
How do I know you are not a scammer or operating a scam?
Financial services companies in Australia require a license, known as an (AFSL) to operate legally. The Australian Bond Exchange license number is 484453, a record of our licence can be verified via the public register of AFSL holder companies available at the Australian Securities & Investment Commission (ASIC) website.
ABE encourages all investors to conduct their due diligence before committing to any investment product. Checking things such as:
- The companies AFSL
- The contact details of the staff you have been dealing with.
- The returns you’re being quoted for certain products
- Speak with a trusted source like your accountant or financial advisor.
You can find more about our history here.