Australian Govt Bonds

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Jan 5, 2010 1:07 pm

Does anyone have experience with Australian Govt Bonds?  Jones can't even buy them, but I have a client that says he can buy them in his Merrill account, and wants to buy some here.  He gave me the CUSIP (not really a CUSIP, but the Aussie version of a CUSIP I think), and I was able to identify it, but have no idea how they get bought.  The rates are singificantly higher than US Treasuries.  Obviously there are currency issues, etc., I just want to be able to have an intelligent conversation with the guy.

Just curious if anyone has dealt with them, and which firms can actually buy/hold them.
Jan 5, 2010 2:49 pm

+1

Jan 5, 2010 3:28 pm
B24:

Does anyone have experience with Australian Govt Bonds? Jones can't even buy them, but I have a client that says he can buy them in his Merrill account, and wants to buy some here. He gave me the CUSIP (not really a CUSIP, but the Aussie version of a CUSIP I think), and I was able to identify it, but have no idea how they get bought. The rates are singificantly higher than US Treasuries. Obviously there are currency issues, etc., I just want to be able to have an intelligent conversation with the guy.

Just curious if anyone has dealt with them, and which firms can actually buy/hold them.





little credit risk

high income

lots-o-currency risk



just make sure client understands aussie dollar move moves bond price.   

Jan 5, 2010 3:39 pm
mlgone:

 
That's what I thought.  That was helpful.  Thanks.
Jan 5, 2010 3:41 pm
Shania Twain:
B24:

Does anyone have experience with Australian Govt Bonds?  Jones can't even buy them, but I have a client that says he can buy them in his Merrill account, and wants to buy some here.  He gave me the CUSIP (not really a CUSIP, but the Aussie version of a CUSIP I think), and I was able to identify it, but have no idea how they get bought.  The rates are singificantly higher than US Treasuries.  Obviously there are currency issues, etc., I just want to be able to have an intelligent conversation with the guy.

Just curious if anyone has dealt with them, and which firms can actually buy/hold them.



little credit risk
high income
lots-o-currency risk

just make sure client understands aussie dollar move moves bond price.   

 
Do you know of firms that are able to buy them?  I just want to know if all the majors and indies can buy them in regular brokerage accounts.
Jan 5, 2010 4:37 pm
mlgone:
B24:
mlgone:

 
That's what I thought.  That was helpful.  Thanks.
 
Geeez b24.  just a little afternoon humor.  At ML you could buy them but you had to be approved to do so.  I believe you had to take a online course. 
 
I knew you were joking.  I just couldn't think of anything snappy at the moment.
Jan 5, 2010 6:44 pm

Probably a good play right now. I've been allocation to Templeton World Bond for my long fixed income exposure. That combined with a nice position in TBT should help for when the treasury market gets slaughtered....



(you might want to post this in the forum on investing- you'd probably get more responses)

Jan 5, 2010 8:43 pm

I figure any firm with an international fixed income desk can get it?  Of course I could be totally wrong.

Jan 6, 2010 9:17 am
shantom1:

Probably a good play right now. I've been allocation to Templeton World Bond for my long fixed income exposure. That combined with a nice position in TBT should help for when the treasury market gets slaughtered....

(you might want to post this in the forum on investing- you'd probably get more responses)

 
I use Templeton World Bond with almost everyone.  However, this is one of those guys that "doesn't believe" in mutual funds ("those are for old ladies that don't know what they're doing!").  Now you know what I'm dealing with.  Good guy, though.
 
And I'd love to post it in the forum on Investing - just direct me to it (hint: there isn't one, and I don't know why!).
Jan 6, 2010 9:23 am
B24:
shantom1:

Probably a good play right now. I've been allocation to Templeton World Bond for my long fixed income exposure. That combined with a nice position in TBT should help for when the treasury market gets slaughtered....

(you might want to post this in the forum on investing- you'd probably get more responses)

 
I use Templeton World Bond with almost everyone.  However, this is one of those guys that "doesn't believe" in mutual funds ("those are for old ladies that don't know what they're doing!").  Now you know what I'm dealing with.  Good guy, though.
 
And I'd love to post it in the forum on Investing - just direct me to it (hint: there isn't one, and I don't know why!).
 
Nothing makes me more angry then when someone says that. I mean, wtf do you mean "you don't believe in" mutual funds/bonds/whatever? Like you're trying to convince him that Santa Claus really exists or something...
Jan 6, 2010 10:49 am

B24- Sorry I meant "General" section.  I have some of those clients too (only when dealing with munis though-they want the individuals not funds).  I have not bought the actual bonds for anyone as I feel far more comfortable allocating to a well diversified portfolio of many countries than trying to pick out the winner (not knocking you, just saying how I respond to those clients- and yes I have some who still insist in buying the individual bonds).  Of all countries Australia is probably in the best shape and their Fed is making sound policy decisions. 

Jan 6, 2010 10:53 am
SometimesNowhere:
B24:
shantom1:

Probably a good play right now. I've been allocation to Templeton World Bond for my long fixed income exposure. That combined with a nice position in TBT should help for when the treasury market gets slaughtered....

(you might want to post this in the forum on investing- you'd probably get more responses)

 
I use Templeton World Bond with almost everyone.  However, this is one of those guys that "doesn't believe" in mutual funds ("those are for old ladies that don't know what they're doing!").  Now you know what I'm dealing with.  Good guy, though.
 
And I'd love to post it in the forum on Investing - just direct me to it (hint: there isn't one, and I don't know why!).
 
Nothing makes me more angry then when someone says that. I mean, wtf do you mean "you don't believe in" mutual funds/bonds/whatever? Like you're trying to convince him that Santa Claus really exists or something...


Yep, I find it funny when someone who has never worked in FS industry proclaims they will not deal with funds, annuities or whatever b/c they don't believe in them.  They are hiring you to navigate the markets and yet they put restrictions that knock out whole asset/product classes.  They are the ones who wind up losing.  Not buying TPINX because it is a fund is the perfect example....
Jan 6, 2010 11:40 am

Actually what is REALLY funny (and what supports my belief that we provide a lot of value) is when someone comes to you for the first time (never having done any investing outside their 401K, or received an inheritance or something), and among your recommendations you are suggesting the use of mutual funds, and they respond something like this..."mutual funds? I heard those are risky.  What's the rate on them?"

That's when you really have your work cut out for you.
And I find virtually nobody (even relatively "savvy" investors) knows what an ETF is.
Jan 6, 2010 11:45 am
B24:

Actually what is REALLY funny (and what supports my belief that we provide a lot of value) is when someone comes to you for the first time (never having done any investing outside their 401K, or received an inheritance or something), and among your recommendations you are suggesting the use of mutual funds, and they respond something like this..."mutual funds? I heard those are risky.  What's the rate on them?"

That's when you really have your work cut out for you.
And I find virtually nobody (even relatively "savvy" investors) knows what an ETF is.
I use ETFs a lot and find this is true.  People's eyes glaze over when you mention ETFs.  They remember the ads for Spyders, Powershares, etc., but they still don't know what they are.  I've learned to have a 3 minute lesson on what an ETF is before recommending one to a client.....with a prospectus in hand, of course.