Corporate Bonds to Buy
When it comes to choosing which corporate bonds to buy and completing investment portfolio optimization, fixed income portfolio management can traditionally take hours of offline analysis and multiple teams of people. BondIT is the intuitive asset management software solution that has been designed specifically to reduce costs and increase investment efficiency by generating instantly optimized fixed income trade proposals for client review. You can choose to use the standard fixed income analytics that BondIT comes with or you can work directly with our team to craft analytics developed specifically for your business or clients’ needs.
Managing fixed income securities on behalf of investors is about more than just choosing which corporate bonds to buy and navigating the corporate bond market for high yield opportunities. To accurately generate sustainable wealth opportunities for clients, portfolio managers and advisors will craft diverse investment portfolios which include a range of fixed income securities across both municipal bonds and higher return opportunities in the higher risk corporate bond market. This helps to mitigate investment risks like credit risk and interest rate risk, generating sustainable sources of income for investors.
Not all investors are alike. Factors such as age and life goals will impact how an investor wishes to rate bonds and long term income opportunities. BondIT works with portfolio managers and client managers to generate fixed income investment proposals with client objectives in mind. Custom-immunize pre-retirement liabilities such as the down payment on a new home or a vacation property, college tuition funds and more using BondIT. Develop diverse optimized investment strategies in seconds and integrate BondIT with your enterprise system to increase the efficiency of internal workflows and free up portfolio managers and advisors for doing what they do best – navigate the bonds market in search a high yield of corporate bonds. Present client proposals in a fraction of the time which are already compliant and used BondIT’s ‘Solve Anyway’ feature for managing fixed income options even when constraints are infeasible.
What corporate bonds to buy?
Asset management of individual bonds and fixed income high yield bond opportunities is typically undertaken offline by teams of analysts using bespoke, internal programs developed over years. This analysis can take hours of work, requiring multiple individuals to generate investment proposals, bond allocation strategies and rebalancing options. BondIT removes the need for extraneous resourcing by offering a complete portfolio optimization solution.
Corporate bonds generally come in two forms: investment-grade corporate bonds and non-investment grade bonds (also known as junk bonds). Investment-grade corporate bonds are usually a lower risk, issued by corporate entities with a strong credit history and rating. There is little risk of default, but the interest payments offered on lower risk bonds are correlated to the risk they pose. Generating income from fixed income assets means choosing the right level of diversification and this may mean including municipal bonds (low risk, low yield government bonds) in a client’s portfolio as well as seeking other options in the stock market. BondIT manages the diversification and optimization of investment portfolios in real-time and using a range of data inputs that are completely customizable.
Junk bonds are usually issued by companies seeking cash flow like start-ups or overcapitalized firms. They will come with a low credit rating making them at a higher risk of default than other more conservative investment opportunities. However, the high risk of default also means that the interest rate on these types of bonds will also be higher, offering a higher yield or total return on a client’s capital investment. If the worst should happen and the bond issuer is unable to meet its commitments, then the investor normally receives either all or a portion of their capital investment back once the company’s assets have been liquidated and the proceeds distributed amongst its creditors.
In rare cases, a junk bond can turn into an angel bond. These types of bonds are issued initially with a low credit rating making them a high investment risk but end up becoming a more stable investment opportunity over the term of the bond. This happens when a company’s credit rating increases, making them more stable than they were when the bond was initially issued. While this sounds great on paper – investors receive a high return on investment from fixed income instruments offered with a high initial interest rate – it comes with other risks like interest rate risk. When a company’s credit rating increases, they may seek to call the bond early, returning the investor’s initial investment and then issue new bonds at a lower interest rate correlate to their new credit rating. Investors then miss out on the regular high-interest coupon payments they thought they had until the bond’s maturity.
Fixed income ETFs and mutual bond funds are ways that investors can diversify their opportunities in the market. BondIT helps to manage fixed income funds quickly and efficiently, returning compliant proposals and rebalancing options instantly. Manage fixed income risk quickly and easily with BondIT and generate the wealth your clients are looking for from their fixed income bonds.
To find out how BondIT can improve fixed income portfolio management efficiency, lower costs and optimize your investment strategies like helping to select which corporate bonds to buy and at what bond price, contact a BondIT consultant today. We’ll take you through exactly what our software solution offers and how we can customize your interface and data inputs to reflect exactly what your business is looking for.