Tuesday 26 November 2013 by FIIG Research Legacy

Convert your one or two bonds into a bond portfolio and diversify your risk

Bonds available in smaller parcel sizes make constructing a diverse fixed income portfolio easy.

Key points:

1.     Smaller parcel sizes make bond portfolios possible for smaller investors.

2.     The number of bonds available in smaller parcels has risen to over 170.

3.     Minimum parcels now come in $10,000, $50,000, and $100,000.

I don’t know any equity investors that only hold one or two stocks, but there are a surprising number of fixed income investors who only hold one or two bonds. This can be partially attributed to the reality that, until a few years ago, most bonds could only be purchased in parcels of $500,000 or more, making a portfolio of bonds accessible only to investors with a large allocation to fixed income.

Times have changed though and FIIG has pioneered the way to providing access to fixed income markets for smaller investors, reducing the minimum parcels to $50,000 and more recently to $10,000 for many bonds. This means that for as little as $50,000 an investor can hold a portfolio of five bonds, greatly increasing diversity in this asset class. Those who hold one or two of these securities can sell a portion of their holdings to move into a wider variety of bonds.

For many, this is not news. We have received substantial interest in clients building portfolios and it comforts me to see this occurring more frequently. There are still quite a few investors though who have yet to take advantage of this opportunity. While some have valid reasons for holding only one bond, others may simply be unaware of the possibilities, so I thought I would use this forum to highlight the wide spectrum of bonds available in these smaller parcels.

Table 1, Table 2, and Table 3 show lists of bonds available in parcels of $10,000, $50,000, and $100,000 respectively. As you can see, there is now a universe of over 170 securities to choose from in smaller parcels, and the list keeps growing.

Table 1 – Bonds available in $10,000 parcels – Bonds in red available to wholesale clients only

Table 2 – Bonds available in $50,000 parcels – Bonds in red available to wholesale clients only

Table 3 – Bonds available in $100,000 parcels – Bonds in red available to wholesale clients only

FIIG is quite proud of this unique achievement and wants to work with our entire client base to assure your portfolios are well-diversified across the fixed income asset class. Please contact your FIIG representative to discuss the opportunities available.