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We all know that investing in the top P2P has been a good plan. But do corporate bonds offer better risk-adjusted value? Historically you had to have megabucks to buy bonds, or invest in a unit trust. However now WiseAlpha are Finteching the Corporate Bond Market and making direct investing available from as little as £100. Yields from high quality corporates can even exceed unsecured consumer debt on P2P platforms and the industry is far older and more solid.
We are joined today by CEO Rezaah Ahmad to discuss corporate bonds in the Fintech Age and WiseAlpha’s platform.
The corporate bond market is literally huge – $11.7trn and in a sense an amazing omission for Fintech so far in its mission to digitise and revolutionise the world of FS.
Topics discussed on the show include:
- how jolly japes at college are less frequent these days. Sad!
- how the English Civil War (1642-51) affects some room rents to this day
- cattle in college
- working hours in Deutsche Bank for newbies in the noughties
- the hollowing out of the work spectrum leading to Battery Farms or free range chickening
- value of starting by getting experience in the corporate world
- what a corporate bond is
- history of corporate bonds from 1700s
- late 19th early 20thC
- growth of credit rating
- for plain corporate bonds not much has changed in the past century
- mini-bonds cf corporate bonds
- market as a whole
- investment grade market (BBB and above) is the largest part of the market
- default rates at that level very low
- top corporate versus government bonds
- changes in rating agencies post 2008
- credit assessment across the credit cycle
- 2008 crisis focused in mortgage market, corporates relatively unaffected
- relevance of unsophisticated borrowers in successive credit crises
- sophistication around corporate lending compared to other lending
- from 2007-2017 the corporate bond market has grown 2.7x
- bank issuance of various types
- corporate bond yields of good quality the same or higher than say unsecured P2P consumer debt which looks like an anomaly given the relative risk
- inability to stock pick in corporate bonds unless you are investing £100k at a time – only options being funds or now WiseAlpha
- 10 largest banks and around 150 funds worldwide control the market – WiseAlpha opening that up for true retail access
- WiseAlphas offering, products, business model and approach
- ability not just to buy but to re-list your bond and sell it again thereby providing liquidity
- WiseAlpha’s fees, net, gross returns
- Custodial arrangements
- can invest from most countries
- offering sterling bonds only now but will offer Euro investments too
- automated investment service coming
And much much more 🙂
Share and enjoy!