Where to buy high interest and low risk income based funds

MaxiRobriguez

but why cant i buy that 911 turbo for this unopened packet of crisps mr porsche man?

JohnWinder

RobM99 said:

High income and low risk?   Lead the stampede!

I  think it was high INTEREST, low risk.

marycanary

MaxiRobriguez said:

but why cant i buy that 911 turbo for this unopened packet of crisps mr porsche man?

The original question may be unsophisticated, but there is no need for such replies. They can only intimidate and stop people from posting and therefore accessing very useful information. In finance, the more nieve the question the more it should be encouraged not ridiculed.
Mary

a_gasman

Very well said Mary, people should be welcomed and encouraged on here.

tedcharse

Linton said:

Sadly this does not mean that these investments are yielding around 6%.  They would have yielded around 6% when issued but since then their price will have risen so that the effective yield is much lower.

Thanks Linton for your clear explanation of the yield calculation.

My friend has bought the US treasury fund for the past 12 months. The fund paid him 0.5% to 0.6% of dividend per month and it also has the Morning Star rating of 3 Stars.

However, it can only be bought through an Asia bank e.g. HSBC (Singapore and Japan). Do you think the fund will go burst easily, like the Lehman Brother funds invested in FNMA bonds!!

I have tried unsuccessfully to find a good income based fund from Vanguard and Post office which pays more than 3% per annum, so I have to take the risk to open an overseas bank account!!

AnotherJoe

tedcharse said:

Linton said:

Sadly this does not mean that these investments are yielding around 6%.  They would have yielded around 6% when issued but since then their price will have risen so that the effective yield is much lower.

Thanks Linton for your clear explanation of the yield calculation.

My friend has bought the US treasury fund for the past 12 months. The fund paid him 0.5% to 0.6% of dividend per month and it also has the Morning Star rating of 3 Stars.

However, it can only be bought through an Asia bank e.g. HSBC (Singapore and Japan). Do you think the fund will go burst easily, like the Lehman Brother funds invested in FNMA bonds!!

I have tried unsuccessfully to find a good income based fund from Vanguard and Post office which pays more than 3% per annum, so I have to take the risk to open an overseas bank account!!

On the grounds theres no such thing as a free lunch, then there's only two possibilities.

1. When the bond matures or when he sells it he will get substantially less than he paid for it substantially reducing the real interest rate in the way Linton explained.

2. Its a scam, he didnt really buy from HSBC just someone pretending to be them,  and they are paying him back some of his own money so he gets confident and  buys more or encourages friends like you who throw aside all good sense to grab at this too good to be true offer to buy. (Q; Why would a US treasury fund only be available from an Asian bank????)

 

Linton

tedcharse said:

Linton said:

Sadly this does not mean that these investments are yielding around 6%.  They would have yielded around 6% when issued but since then their price will have risen so that the effective yield is much lower.

Thanks Linton for your clear explanation of the yield calculation.

My friend has bought the US treasury fund for the past 12 months. The fund paid him 0.5% to 0.6% of dividend per month and it also has the Morning Star rating of 3 Stars.

However, it can only be bought through an Asia bank e.g. HSBC (Singapore and Japan). Do you think the fund will go burst easily, like the Lehman Brother funds invested in FNMA bonds!!

I have tried unsuccessfully to find a good income based fund from Vanguard and Post office which pays more than 3% per annum, so I have to take the risk to open an overseas bank account!!

The problem with investing in foreign bonds,  even safe ones, is that you are bringing in the risk of currency movements which could negate any advantage in % returns.  So if you buy a US $ bond when it matures it is possible that changes in the $/£ rate could mean you get less £s back.  However I dont believe that any such investment is paying 0.5%/month - 6%/year. Someone is confused.  Perhaps you can let us know its name.

There are plenty of funds which now generate more than 3% income. But they arent low risk.  It is quite possible that their value and their return could decrease significantly over time.

An HSBC US Treasury fund is very unlikely to go bust, barring a 3rd World War.  Both HSBC and the US treasury are very solid.

AlanP_2

US Treasuries aren't paying anything like 0.5 / 0.6% per month.

https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield - 30 Year Treasuries are only just over 2%.

Indicative rates you can get on a currency hedged bond as shown her at ~1.47% going forwards based on today's purchase price https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/v/vanguard-us-government-bond-index-accumulation


Which actual fund, purchased from who is paying your friend 5-6% a year for the same thing?

Voyager2002

tedcharse said:

My friend has bought the US treasury fund for the past 12 months. The fund paid him 0.5% to 0.6% of dividend per month and it also has the Morning Star rating of 3 Stars.

However, it can only be bought through an Asia bank e.g. HSBC (Singapore and Japan). Do you think the fund will go burst easily, like the Lehman Brother funds invested in FNMA bonds!!

In which country and currency is your friend's account? Assuming that it really is HSBC that is holding his money, perhaps it is a branch in a country with high inflation and his dividends are being paid in local currency. For example, if the Thai Kip were to be losing its value at a rate of 17 per pent each year, then it would be quite easy for a dollar-based investment to pay dividends in Kip of 6 per cent each year.

(I know that Thailand does not use the Kip but I used that as an illustration.)

jimjames

tedcharse said:

Linton said:

Sadly this does not mean that these investments are yielding around 6%.  They would have yielded around 6% when issued but since then their price will have risen so that the effective yield is much lower.

I have tried unsuccessfully to find a good income based fund from Vanguard and Post office which pays more than 3% per annum, so I have to take the risk to open an overseas bank account!!

If you are determined to put money overseas then we probably won't be able to influence you but there are plenty of options paying reasonable levels of income that are UK based and paid in sterling. You appear to not be worried about risk so why not look at investment trusts? They're mainstream, traded on LSE and no currency or scam risks.

https://www.hl.co.uk/news/articles/archive/the-ten-investment-trusts-with-the-best-income-records