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Can I invest in Commonwealth Government Bonds?

Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.

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Can I invest in Commonwealth Government Bonds?

Hi James, I run a SMSF and bank rates have been ordinary. I see Comm Bonds are up around 3%. I like the idea that the investment is Government guaranteed and that I could sell, all or part of my holding at any time. Can I buy and sell Commonwealth Bonds on the ASX? What yield can I expect for 2,3,4 year maturities?

Answer

Hi Lindsay,

You can purchase Australian Government Bonds direct on the ASX and they can be held though Chess the same way a stock is held, which is simpler and better value than holding them in safe custody as bonds are typically held. A  2 year treasury is paying ~2.75% pa, 3 years are around 3% & 4 years are around 4%. With interest rates rising there are now more options available for lower risk investors to gain a palatable return which hasn’t been the case in recent years.

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Vanguard Australian Fixed Interest Index ETF (VAF)
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