Tuesday, 24 May 2016

Recent Purchase of FCL 3.65% 220522

I recently purchased 10,000 units of FCL 3.65% bonds at $0.988, right after the ex- interest date. I would classify this as an impulsive purchase, as being right after the ex- interest date, I would expect the price to drop further. Also, with an expected increase in interest rate, I would expect this bond to be less worth it in time to come. However, at current point in time, this buy will allow me to earn more than 3% interest per year, which at least counter the effect of inflation.

There will be no interest from this purchase in the month of May 2016, since the purchase is right after the ex- interest date. The next time I will get any interest will be on 22 Nov 2016.

The following is a breakdown of the returns based on this purchase. Due to having no interest collected in the month of May 2016, and me purchasing it right in May, the IRR is at most 3.86%, and at least 3.49% as shown below:

With this purchase, my retail bonds holdings compared to my entire asset are relatively high, and my plan in the next half of the year is to look into other forms of investments.

Disclaimer: I am not a financially savvy person, so what I is written is based on what I deduce from my limited research and reading. This may not be an accurate account of the real scenario, and you are to do your own judgement on whether such funds are good or not for yourself. I won't be held liable for any inaccuracies or omissions (see also my disclaimer at the end of the blog).

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