Global Bonds Sentiment

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Hi pianist

I use IBKR, they charge a commission of 0.002% for US treasuries.

The good points about the Manulife notes:
- There is no forex risk
- Holdings are placed in CDP which feels safer than custody by brokerage firms

Bad points:
- Callable, so your upside is capped in the event of interest rate decline
- Dependent on financial stability of Manulife. During times of market distress like GFC/covid, your bonds may plunge together with equities, which defeats the purpose of a bond component
- Bonds listed on SGX tend to have poorer liquidity, based on what I experienced so far

Overall, I still find US treasuries more attractive.
All my US stocks have to pay some withholding taxes on the dividends, so i am quite surprised that 10 year US treasury bond is tax free, but anyway, i didnt do research on this so you are probably more familiar.

As for the downside, if interest rates go up further, you will have fair value losses on your 10 year bonds if you sell. if you hold to maturity then you will be unaffected.

But if i am going to hold for 10 year, a group of carefully chosen stocks will make more sense to me
The current exchange rate is around 1 USD : 1.35 SGD. If at maturity, the exchange rate is 1 USD : 1.3 SGD, that would be around a 3% loss. Of course, conversely, USD could also strengthen further agst SGD. I guess the bright side is it is less than a year's yield.

I wld also imagine it will be quite a hassle(for tracking) if one were to convert(currency) multiple times to invest in batches.

"...Generally, for non-U.S. Person investors, interest earned on bonds and commercial paper issued by U.S Treasury or by US government agencies are generally exempted from U.S. tax withholding taxes if the interest qualifies as portfolio interest.

While U.S. Assets owned by non-U.S. Person investors are subject to 40% estate tax after the first $60,000 is exempted, U.S. Treasury bonds and corporate bonds of US publicly traded companies are exempt from estate tax...."

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