Accredited Investor's Guide to

Fixed Income in
Singapore
October 2023
Table of Contents

Introduction

Public vs Private Fixed Income

Strategies for Accredited Investors

Constructing Your Portfolio

Getting Access

This guidebook is intended solely for the use of accredited investors as defined by the relevant regulatory
authorities. The information contained herein is for informational purposes only and does not constitute an
advertisement or a solicitation to invest in any financial products or services. While every effort has been
made to ensure the accuracy of the information, readers should consult with a qualified financial adviser
before making any investment decisions. The publisher of this guidebook and its contributors disclaim any
liability for any inaccuracies or omissions.

Introduction

Congratulations on joining
the ranks of accredited investors
in Singapore!

Stepping into this realm opens doors to unique opportunities for growing
your financial portfolio. One asset class that should command your attention
is fixed income. Especially in the current environment of rising interest rates,
fixed income assets not only serve as a counterbalance to the
unpredictability of equities but also offer avenues for enhanced yields.
Introduction

The Role of Fixed Income in a Portfolio

Consider fixed income as the bedrock of your investment

strategy. Instruments like bonds offer regular coupon
payments, creating a consistent flow of income. Compared
to equities, they carry a lower risk profile, minimising
volatility and safeguarding your principal. Integrating fixed
income into your portfolio serves as a hedge, stabilising
your investments when the equity markets are in turmoil.
Introduction

Higher Yields in

a Rising Rate Environment

The upswing in interest rates is more What sets these private fixed income
than a mere headline; it's a game- assets apart is their inherent
changer for the fixed income market. structure, offering investors a buffer
Newly issued fixed income securities against the rollercoaster nature of
are offering significantly higher equities markets. In other words, not
yields, making this asset class a only can you benefit from
focal point for discerning investors.

 exceptional returns, but you can also
insulate your portfolio from broader
For those who delve into private market volatility.

fixed income opportunities, the

prospects are even more enticing. In this guidebook, we will be
Some of these private offerings are exploring various fixed income
hitting record-high returns, standing strategies specifically tailored for
in stark contrast to more traditional accredited investors, enabling you to
investment routes such as equities. capitalise on the opportunities
These aren't just attractive numbers; presented by this rising interest rate
they represent a genuine opportunity environment.

for substantial income generation.

Public vs Private

What are Public Fixed Income Investments?

A key advantage of public fixed income investments is their liquidity. As

they are traded on public exchanges, they can be readily bought and

sold to convert into cash. This provides investors with flexibility.

When we talk about public fixed SGS are debt securities furnished by
income investments, we're referring the Singapore government, boasting
to debt instruments such as bonds maturities that range from as short
that are issued by public entities—be as one month to as long as 30 years.
it governments, their agencies, or These are considered extremely low-
publicly listed corporations. These risk instruments, underpinned by the
instruments are readily accessible, government's 'AAA' credit rating.
traded on public exchanges and However, the trade-off is that the
open to all classes of investors. In yields tend to be modest. On the
Singapore, the primary vehicles for other hand, corporate bonds, issued
these investments are Singapore by listed firms in Singapore, often
Government Securities (SGS) and promise higher yields to balance out
corporate bonds.
the elevated risk profile. These yields
—and associated risks—can
fluctuate considerably depending on
the issuer's creditworthiness and the
bond's maturity.
Public vs Private

What are Private Fixed Income Investments?

Private fixed income assets tend to be less liquid than their publicly

traded counterparts. While risks exist, private fixed income can

potentially boost portfolio returns and diversification.

Venturing into private fixed income Access to higher-yielding assets -

means focusing on debt instruments private lenders can negotiate
that are not publicly traded. These elevated interest rates on loans and
include private credit funds, peer-to- pass these returns to investors.

peer lending platforms, and private

placement bonds, and more. 

Portfolio diversification - private

fixed income provides exposure
For accredited investors willing to beyond traditional stocks and bonds.

take on some additional risk, private

fixed income can offer compelling Tailored solutions - private offerings
rewards such as: allow investors to select
opportunities aligned with their
specific return objectives and risk
tolerance.
Strategies for Accredited Investors

Government Securities

Singapore
SGS Bonds Treasury Bills
Savings Bonds

Yield 3% - 3.6% 3% - 4% 3.3% - 3.86%

2, 5, 10, 15, 20, 30

Term 10 years 6 or 12 months
years
Minimum
$500 $1,000 $1,000
Investment
Interest Payment
Every 6 months Every 6 months Buy at discount
Cycle

The yield for Singapore Government

Securities is generated through the The primary risk is
government's use of the funds raised from interest rate risk; if
these securities to finance public projects, interest rates rise, the
manage national debt, or sustain other price of existing SGS
state-level initiatives.

may fall.

The government pays back the principal However, the credit risk
and interest to investors at maturity or on is minimal due to the
predetermined dates, using revenue high credit rating of the
generated from taxes or other financial Singapore government.
instruments.
Strategies for Accredited Investors

High-yield Fixed Deposit Accounts

RHB HL Bank Syfe

Yield Up to 3.60% 3.60% 3.8%

Term 6 or 12 months 12 months 3 months

Minimum Deposit $20,000 $100,000 No minimum

Interest Payment
End of term End of term End of term
Cycle

The yield in high-yield fixed deposit

accounts is generated through the The main risks are
financial institution's lending activities. interest rate risk and
Essentially, when you deposit funds into a inflation risk. The fixed
fixed deposit account, the financial interest rate might
institution lends out these funds to become less attractive
businesses or other customers at higher if market interest rates
interest rates. The difference between the rise. Additionally, the
interest rate offered to borrowers and the real return could be
interest rate paid to depositors is the net eroded by inflation.
interest margin, which serves as a profit
for the financial institution.
Strategies for Accredited Investors

Money Market Funds

Yields in money markets are generated

through the interest rates that The primary risks
financial institutions and corporations include interest rate risk
offer on their short-term debt and credit risk, though
instruments. These entities issue both are generally lower
short-term debt to meet immediate compared to other fixed
liquidity needs or finance operations, income strategies.
and they pay interest to investors as There's also the risk of
compensation. The interest rates are the investment not
generally reflective of the prevailing keeping pace with
short-term interest rates in the inflation.
economy. Because the borrowing is
short-term, these investments are
generally considered to be low-risk.

You can use these products to invest in Money Market Funds:

Strategies for Accredited Investors

Money Market Funds

The following yield figures are based on SGD deposits. (Last updated: Oct 2023)

Institution Product Yield Withdrawal Time

Cash Smart Secure 3.6% - 3.8%

Endowus Cash Smart Enhanced 4.4% - 4.7% Up to 4 days

Cash Smart Ultra 4.7% - 4.9%

Syfe Cash+ Flexi 3.7% Up to 2 days

Simple 3.6%
StashAway Up to 4 days
Simple Plus 4.90%

Moomoo Cash Plus 3.73% Up to 4 days

Tiger Brokers Tiger Vault 3.83% Up to 3 days

Phillip Capital Smart Park 3.23% Up to 1 day

FSM One Autosweep 3.21% Up to 1 day

Strategies for Accredited Investors

Corporate Bonds

The yield comes from the interest rate

that the company agrees to pay investors Average Yield
for lending them money. Companies use
these loans for various business activities
2% - 15%
MIN $20k REQUIRED
like expanding operations or funding new
projects. The interest is usually paid at
regular intervals until the bond matures, at
The main risk is that the
which point you get your initial investment
company could run into
back.
financial problems and
be unable to pay you
You can use these products to invest in
back. There's also a
Corporate Bonds:
chance that interest
rates could rise, making
other investments more
attractive and reducing
the value of your
existing bonds.
Strategies for Accredited Investors

Corporate Bonds

The following yield figures examples of current corporate bond offerings in the market.
(Last updated: Oct 2023)

Institution Product Yield Minimum Investment

ICH Gensis Genesis Bond 5% - 10% USD 20,000

Azalea
 Astrea VI < 5% USD 20,000

(indirect wholly owned

subsidiary of Temasek)

Singtel Singtel SLB Bonds < 5% USD 20,000

Korea

KDB 23OCT2026 5.4% USD 200,000

Development Bank

Nissan Nissan Motors 7.3% USD 2,000

Strategies for Accredited Investors

Private Placement Bonds

Private placement bonds are like corporate

bonds, but they're not available to the Average Yield
general public. These are special offers
made to a select group of investors,
7% - 12%
MIN $100k REQUIRED
usually including accredited investors.
They can offer higher returns but usually
come with higher risks.

The primary risks

include the financial
The yield comes from the interest rate set
stability of the issuing
when the bond is issued. Companies use
company and less
these funds for various purposes like
liquidity compared to
business expansion or acquisitions.
publicly traded bonds.
Because these bonds aren't publicly
These bonds are also
traded, the terms can be more flexible,
generally not as
often resulting in higher yields for
thoroughly regulated,
investors.
which adds another
layer of risk.
You can explore private placement bonds
offered by these companies:
Strategies for Accredited Investors

Peer-to-Peer Lending (Direct Lending)

Peer-to-peer lending, often abbreviated

as P2P lending, involves lending money Average Yield
directly to individuals or small businesses 7% - 25%
via an online platform. This bypasses Low Minimums at $20
traditional financial institutions, often
resulting in higher returns for investors
and more accessible loans for borrowers.
The main risks include
These higher rates are possible because
borrower default and
borrowers are often unable to secure
platform risk, which is
loans from traditional financial institutions
the risk that the P2P
and are therefore willing to pay higher
platform itself could
interest.
face issues such as
insolvency. There's also
You can use these P2P lending platforms in the risk of lower
Singapore: liquidity as these loans
often can't be easily
sold or transferred.
Strategies for Accredited Investors

Lending to Master Lenders (e.g. FinTechs)

In the evolving landscape of peer-to-peer

lending, some platforms offer an innovative Average Yield
approach where you lend capital not directly 7% - 13%
to individual borrowers but to fintech firms MIn $100K Required
or other lending platforms. These fintechs,
in turn, lend to consumers or small and
medium-sized enterprises (SMEs). This
The main risks of
model offers a layer of abstraction that may
lending to fintech firms
reduce some risks associated with direct
via a P2P platform
lending. It allows investors to benefit from
encompass platform
the fintech's expertise in credit assessment
risk, where the fintech
and loan management, while still enjoying
itself could face
potentially higher yields. This approach also
financial or operational
enables a broader diversification of risk, as
issues, and credit risk
your investment is indirectly spread across
related to the fintech's
the fintech's entire loan portfolio.
own loan portfolio.
Additional concerns
You can use these lending platforms to lend include liquidity risk,
to FinTechs in Singapore: and regulatory risk.
Strategies for Accredited Investors

Investing into Private Credit Funds

A Private Credit Fund pools money from

multiple investors to lend to businesses or Average Yield
individuals. These funds are managed by 5% - 13%
professional fund managers who seek to MIn $250K Required
optimize returns through a diversified
portfolio of loans. They offer a way to tap
into the private debt market without
Risks include borrower
having to directly lend to individual
default,
borrowers.

mismanagement, and
market risk related to
This is very similar to lending to a FinTech.
economic conditions
However, Private Credit Funds may have
that could impact
different legal structure and offer a
borrowers' ability to
different risk / reward profile for investors.
repay. Liquidity can also
be limited, as these
Example Fund Managers funds often have lock-
up periods.
Strategies for Accredited Investors

Choosing the Right Fixed Income for You

The following yield figures are based on SGD deposits. (Last updated: Oct 2023). The
minimum investment and lock up period may differ from provider to provider.

Minimum
Strategy Yield Lock Up Period
Investment

Government Securities 3% - 4% $500 6 months to 30 years

High-yield Fixed Deposit 3.6% - 3.8% No minimum 3 to 12 months

Money Market Funds 3.21% - 4.9% No minimum No lockup

Corporate Bonds 2% - 15% $20,000 1 to 5 years

Private Placement
7% - 12% $100,000 3 to 24 months
Bonds

P2P (Direct) 7% - 25% $20 3 to 12 months

P2P (FinTechs) 7% - 13% $100,000 12 to 24 months

Private Credit Funds 5% - 13% $250,000 2 to 10 years

Constructing Your Portfolio
Constructing a well-balanced fixed income portfolio is an art that goes
beyond just picking individual investment options. It's about strategically
assembling these options to match your financial goals, risk tolerance, and
investment horizon. Let's delve into how accredited investors can approach
this task, given their broader palette of both private and public fixed income
instruments.

Focus on High-Quality Manage Interest Rate

Assets Risk and Duration Risk
Selecting high-quality assets is Interest rates and the duration of
your first line of defence against your assets are inextricably linked.
potential losses. Look for issuers Understanding how these factors
with strong credit ratings, strong affect your portfolio's value is crucial.
credibility, transparent operations, Shorter-duration assets are less
and a history of stability. High- sensitive to interest rate changes,
quality doesn't necessarily mean offering a cushion in volatile markets.
low yield; many private placement Conversely, longer-duration assets
bonds and private credit funds may offer higher yields but come
offer attractive returns while with increased sensitivity to interest
maintaining a rigorous selection rate shifts.

process for their underlying assets.

Constructing Your Portfolio

Diversify Across Rebalance as Needed
Geographies and
Sectors
Your investment reach as an Market conditions and asset values
accredited investor is global. Take fluctuate. Periodic rebalancing
advantage of this by diversifying ensures your portfolio stays aligned
your fixed income assets across with your investment goals and risk
different regions and sectors. tolerance. For example, if high-yield
Different economies and industries bonds have done well, you might find
respond differently to economic your portfolio overly concentrated in
changes, providing a natural hedge them. Rebalancing would involve
against localised downturns.
selling some of these to invest in
other asset classes, maintaining your
desired asset allocation.

Manage on an Seek Professional

Ongoing Basis Guidance
Fixed income investing isn't a 'set Navigating the complexities of fixed
and forget' game, especially with income investing can be challenging.
higher-risk assets. Regularly review A professional adviser can offer
your portfolio's performance, the insights tailored to your individual
financial health of the issuers in circumstances, helping you optimise
your portfolio, and any market your asset allocation, manage risks,
news that could impact your and explore new opportunities.
investments.
Getting Access to Deals
While this guide offers a comprehensive overview of the fixed income
landscape, many of the more lucrative private fixed income assets are not
publicly accessible; even for accredited investors.

For those seeking a deeper dive into the specific deals offered by various
financial institutions.

Open Bluejay Account -->

Discover All Fixed Income Get Connected Directly with

Options in Detail Financial Institutions
Gain access to an exhaustive list Bluejay serves as a bridge between
of fixed income opportunities, you and financial institutions offering
complete with all the granular exclusive fixed income deals,
details that can help you make streamlining the process and making
an informed decision. it easier to participate in these
opportunities (lower minimums,
Learn and Share Knowledge single KYC verification, and more).
with Other Investors
Becoming part of the Bluejay
community allows you to share
experiences and insights with
other accredited investors. This
collaborative environment is
conducive to making more
informed investment choices.
FOR MORE INFORMATION

Sherry Jiang

CEO and Co-founder

sherry@[Link]