- The first constraint is that investors already have the CPF programme and can contribute via the CPF Retirement Sum Top Up Plan of up to $8,000 a year into their CPF Special account, giving them a riskless 4% return.
- The second constraint is that, if CPF is not available as an option, a reasonable yield of 3% can be attained with the ABF Singapore Bond Index Fund (Ticker : A35) which invests in bonds backed by the Singapore government.
- The third constraint is that we’re entering a high inflation regime with rates as high
With rising interest rates, we can begin to relook at the idea of purchasing retail bonds for our portfolio. This article considers two retail bond choices for intermediate investors who already have a dividend-yielding portfolio consisting of local blue-chip stocks, REITs and business trusts such as the ones built by the ERM programme.
Constraints for intermediate investors
Intermediate should consider the following constraints when looking at retail fixed-income products.