Why Australians are warming to corporate bonds
Australian super funds’ “underinvestment” in bonds is declining. Despite this trend, Australian retirement funds continue to invest far more in deposits and less in bonds than their counterparts abroad. However, the reasons behind the Australian preference for deposits have evaporated. New regulations mean depositors give up ready access to funds if they want returns near the inflation rate. Even term deposit yields are now lower than a typical corporate bond or corporate bond fund. In the past, investors were rational in preferring deposits over corporate bonds. Now it makes sense for a more balanced allocation between the two types of investments.
Read the full report here: Spectrum Insights – Why Australians are warming to corporate bonds