Bonds are debt securities, similar to an I.O.U. When you purchase bonds, you are lending money to a government or corporation, broadly known as issuers. Issuers of bonds may use the money to finance their operations or investments. In return for the loan, the issuer generally pays you income at a specified rate and on specified dates during the life of the bonds (except zero-coupon bonds), and to repay the face value of the bonds when they mature.
At HSBC, we offer a wide range of Singapore dollar bonds and International bonds (ie bonds denominated in a currency other than Singapore dollar) for you to choose from to meet your financial objectives and investment needs.
Singapore dollar bonds are debt securities issued usually by the Singapore government, statutory boards, corporations and conglomerates in Singapore dollar. Foreign companies may also issue bonds denominated in Singapore dollar.
International bonds are debt securities issued by multi-national corporations and governments from around the world. International bonds are available in a variety of currencies, like US dollar, sterling, and euro.
Bonds may be suitable for you if you prefer to receive regular income on your capital throughout the investment period. Those who are retired or near retirement may find the regularity of income payments useful to help cover living expenses.
There is potential for you to make capital gains by selling the bonds if they appreciate in market value.
Diversification is important because different asset classes respond differently to different market conditions. An investment portfolio that comprises bonds, in addition to other asset types (eg equities), can help lower the overall risk of your portfolio as bonds tend to be less volatile as compared to equities. Therefore, bonds help to protect your portfolio against excessive market volatility.
This document is provided for information only and is not intended as an offer to buy or sell securities. Opinions and estimates expressed are subject to change without notice and HSBC expressly disclaims any and all liability for representation or warranties, express or implied, contained herein or for omissions. As this document is circulated to all clients, the specific investment objectives, personal situation and particular needs of any specific person have not been taken into consideration. HSBC does not but may from time to time have an interest in the securities and may hold long or short positions for its own account or those of its clients.
The price of bonds can and does fluctuate and any individual bond may experience upward or downward movements, and may even become valueless. There is an inherent risk that losses may be incurred rather than profit made as a result of buying and selling bonds. The holder of the bonds bears the credit risk of the issuer and has no recourse to HSBC unless the latter is the issuer itself. The decision to place the investment should be based on your own judgement without relying on any material provided or advice given by the Bank or its representative.
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