What is the difference between Corporate Bonds and Corporate Debt Funds?
April 5, 2009 by How Savings Bonds Work
Filed under More Bonds Answers
Can you answer ac26xp’s question about Bonds?:
For example I can buy shares of the exchange traded fund: IShares S&P US Preferrd Stock Index Fund (PFF), which is classified as a Corporate Debt Funds BBB-Rated.
Is a corporate debt fund like PFF a collection of corporate bonds?
Thanks !
How to Make Money Online
For example I can buy shares of the exchange traded fund: IShares S&P US Preferrd Stock Index Fund (PFF), which is classified as a Corporate Debt Funds BBB-Rated.
Is a corporate debt fund like PFF a collection of corporate bonds?
Thanks !
How to Make Money Online
What accounts for the difference between treasury bond rates, and corporate bonds?
March 22, 2009 by How Savings Bonds Work
Filed under More Bonds Answers
Can you answer Scott S’s question about Bonds?:
Specifically regarding US Treasury prices and yields on a 30 yr bond, and a big corporation like GM?
High Yield Corporate Bonds
Specifically regarding US Treasury prices and yields on a 30 yr bond, and a big corporation like GM?
High Yield Corporate Bonds
Financial Investment 12 - Term Deposits, Government Bonds,treasury Bills & Money Market Funds
March 7, 2009 by How Savings Bonds Work
Filed under About Bonds
Financial instruments found in the debt market include:
1. Term Deposits
2. Government bonds
3. Treasury Bills (T-Bills)
4. Money Market Funds
5. Corporate Bonds and Debentures
6. Domestic Bond Funds.
In this article, we will only discuss the term deposits, government bonds, treasury bills and money market fund.
1. Term DepositsTerm Deposits are qualifying instruments for tax shelter and will share the following characteristics.
a) Short-Term Deposit: less than 1 year
b) Long-Term Deposit: to 5 years.
Interest Rate: depends on length of deposit and competitive interest rates available in the marketplace.Long-term investments are called Guaranteed Investment Certificates (GICs) and can be purchased for a lesser amount such as $500. They are also called a Certificate of Deposit (CD). Rates may vary as little as 0.10% amongst the deposit takers.Term Deposits may be cashed prior to maturity, but this may incur a penalty. GICs generally cannot be cashed before they mature, although some deposit takers are now more flexible.
2. Government saving bonds
Country residency is required and guaranteed by the country of issuer.
a) Are registered bonds that provide protection against loss, theft or destruction.
b) Are not transferable.
c) Can be purchased for a minimum of $100 to a maximum of $500,000.
d) The interest is taxable and is competitive with GICs.
e) Mature in 10 to 12 years.
In Canada, Canadian saving bonds are issued as either R bonds or C bonds.
In US, US saving bonds are issued as series EE bonds, Series I BondsThe investment risk for government savings bonds Issued by Canadian government or US government is nil, since the bond is guaranteed by the federal government.
3) Treasury bills (T bill)Treasury bills are a short term money market instrument and issued by the federal government in terms of 30, 60, 91, 182 and 364 days. They are sold by auction.Banks and investment houses buy at wholesale in multiples of $5 million denominations. They then sell these T-Bills to brokers and investment dealers who break down their purchases into $1,000 lots.
T bills are sold discount to their face values and also sold on the secondary market and their value fluctuates depending on competitive interest rates at the times of resell.The short-term nature of T-Bills does not cause a large exposure to interest rate risk, but to some extent there is an inflation risk.If a T-Bill is sold before maturity, any gain is taxed as interest.
4. Money market fundsMoney market fund holds T bills and other short term money market contracts. Investors pool the investments through the mutual fund. Units in this fund can be bought and sold daily. Money market funds produce capital gains although their primary function is to generate interest income. Interest is generally paid monthly, while capital gains are paid annually.The benefits of money market funds include
a) Security of principal
b) Liquidity.
c) Eligible for plan registration
I hope this information will help. If you need more information, you can read the complete series of the above subject at my home page:
Kyle J. Norton
http://lifeanddisabitityinsuranceunderwriter.blogspot.com
/http://financialinvesting12.blogspot.com/
All rights reserved. Any reproducing of this article must have all the links intact.
Thanks to Kyle J. Norton for contributing this article to our Bonds blog:
1. Term Deposits
2. Government bonds
3. Treasury Bills (T-Bills)
4. Money Market Funds
5. Corporate Bonds and Debentures
6. Domestic Bond Funds.
In this article, we will only discuss the term deposits, government bonds, treasury bills and money market fund.
1. Term DepositsTerm Deposits are qualifying instruments for tax shelter and will share the following characteristics.
a) Short-Term Deposit: less than 1 year
b) Long-Term Deposit: to 5 years.
Interest Rate: depends on length of deposit and competitive interest rates available in the marketplace.Long-term investments are called Guaranteed Investment Certificates (GICs) and can be purchased for a lesser amount such as $500. They are also called a Certificate of Deposit (CD). Rates may vary as little as 0.10% amongst the deposit takers.Term Deposits may be cashed prior to maturity, but this may incur a penalty. GICs generally cannot be cashed before they mature, although some deposit takers are now more flexible.
2. Government saving bonds
Country residency is required and guaranteed by the country of issuer.
a) Are registered bonds that provide protection against loss, theft or destruction.
b) Are not transferable.
c) Can be purchased for a minimum of $100 to a maximum of $500,000.
d) The interest is taxable and is competitive with GICs.
e) Mature in 10 to 12 years.
In Canada, Canadian saving bonds are issued as either R bonds or C bonds.
In US, US saving bonds are issued as series EE bonds, Series I BondsThe investment risk for government savings bonds Issued by Canadian government or US government is nil, since the bond is guaranteed by the federal government.
3) Treasury bills (T bill)Treasury bills are a short term money market instrument and issued by the federal government in terms of 30, 60, 91, 182 and 364 days. They are sold by auction.Banks and investment houses buy at wholesale in multiples of $5 million denominations. They then sell these T-Bills to brokers and investment dealers who break down their purchases into $1,000 lots.
T bills are sold discount to their face values and also sold on the secondary market and their value fluctuates depending on competitive interest rates at the times of resell.The short-term nature of T-Bills does not cause a large exposure to interest rate risk, but to some extent there is an inflation risk.If a T-Bill is sold before maturity, any gain is taxed as interest.
4. Money market fundsMoney market fund holds T bills and other short term money market contracts. Investors pool the investments through the mutual fund. Units in this fund can be bought and sold daily. Money market funds produce capital gains although their primary function is to generate interest income. Interest is generally paid monthly, while capital gains are paid annually.The benefits of money market funds include
a) Security of principal
b) Liquidity.
c) Eligible for plan registration
I hope this information will help. If you need more information, you can read the complete series of the above subject at my home page:
Kyle J. Norton
http://lifeanddisabitityinsuranceunderwriter.blogspot.com
/http://financialinvesting12.blogspot.com/
All rights reserved. Any reproducing of this article must have all the links intact.
Thanks to Kyle J. Norton for contributing this article to our Bonds blog:
I have been studying natural remedies for disease prevention for over 20 years and working as a financial consultant since 1990
Eurobonds. Foreign corporate bonds. How can I trade them. Which broker provides such a service?
March 5, 2009 by How Savings Bonds Work
Filed under More Bonds Answers
Can you answer Adilius’s question about Bonds?:
Eurobonds. Foreign corporate bonds. How can I trade them. Which broker provides such a service?
Us Savings Bonds Series Ee
Eurobonds. Foreign corporate bonds. How can I trade them. Which broker provides such a service?
Us Savings Bonds Series Ee
all of the following are characteristics of corporate bonds EXCEPT?
March 5, 2009 by How Savings Bonds Work
Filed under More Bonds Answers
Can you answer x700’s question about Bonds?:
A. you buy them at a minimum value of 5000
B. Represent debt to a private corporation
C. you can purchase them from a stockbroker
D. Have no tax advantages
A. you buy them at a minimum value of 5000
B. Represent debt to a private corporation
C. you can purchase them from a stockbroker
D. Have no tax advantages
I think it is D because corporate bonds are taxable, but can it be A too? I thought you can buy it at 1000$ too. Any help?
Cashing In Savings Bonds
