Kakande alex needs to clarify this issue. I do not think you can re_invest the cash flows payments from the Tbonds into the Same Tbond. The T_bond is more like a fixed deposit amount, which you cant not add on. If we would be adding money to the already purchased T-bonds, then one wouldnt necessirily need to purchase another T_bond.
On the other hand, one can put the cash flow payments accruing from the T-bond into the Unit trust/MMFs, which can then build up for buying a new T_bond.
It's very possible.You can re-invest the coupons in the same bond by acquiring it on the secondary market immediately or waiting for the next primary auction, it's not automatic but you can direct your banker to do it for you.
To my view, everything has it's own purpose. Unit trusts are flexible, you can shift from one investment to another at anytime. The fees on unit trust are fixed for all find managers by The authority only 2% of the interest and it's not reflected to your earnings. The earnings you get on your account as yours already. You can even specify the risk appetite basing on the purpose of your investment eg if it's emergency fund or monthly expenditure where you need money very often, you select low risk, low interest just to protect your money from inflation. Whereas T bonds, they're controled by the central bank basing on economic situation. If the government needs much money, it will rise interest to attract more investors, if not vise versa. Yes even unit trusts are affected by the economic conditions but remember, unit trusts have various investment options where if money markets aren't performing well, and your risk appetite is high, you can shift to real estates.
T. Bonds are best for those who already have made some money but unit trusts is for starters or those still hungry to make more and have a lot of responsibilities at hand. You make one account of an emergency fund with zero risk appetite, another school fees account with 2 risk appetite and make capital accumulation investment of 5 or above risk appetite.
1. But the fund management fee of unit trusts is on interest made not principle.
2. Reinvest in bonds is Manual and basing on an assumption that you'll get that same bond same conditions which is more theoretical than practical
Kakande alex needs to clarify this issue. I do not think you can re_invest the cash flows payments from the Tbonds into the Same Tbond. The T_bond is more like a fixed deposit amount, which you cant not add on. If we would be adding money to the already purchased T-bonds, then one wouldnt necessirily need to purchase another T_bond.
On the other hand, one can put the cash flow payments accruing from the T-bond into the Unit trust/MMFs, which can then build up for buying a new T_bond.
For treasury bonds is better, but what l see it needs to be done by people who have money
Is it possible to reinvest in the same bond? I need to understand well how this works. i will be very grateful.
It's very possible.You can re-invest the coupons in the same bond by acquiring it on the secondary market immediately or waiting for the next primary auction, it's not automatic but you can direct your banker to do it for you.
How about the other factors favoring unit trusts over treasury bonds
1. Easier to setup accounts as well as fund - any amount at any time
2. Easier to withdraw when needed
3. Easier to track growth of investment - transparency
4. Better User experiences - look at UAP dashboard, FinTECH solutions like Xeno
And another one more, to remember, unit trusts don't charge fees on investments, they only charge that 2% on profits only
To my view, everything has it's own purpose. Unit trusts are flexible, you can shift from one investment to another at anytime. The fees on unit trust are fixed for all find managers by The authority only 2% of the interest and it's not reflected to your earnings. The earnings you get on your account as yours already. You can even specify the risk appetite basing on the purpose of your investment eg if it's emergency fund or monthly expenditure where you need money very often, you select low risk, low interest just to protect your money from inflation. Whereas T bonds, they're controled by the central bank basing on economic situation. If the government needs much money, it will rise interest to attract more investors, if not vise versa. Yes even unit trusts are affected by the economic conditions but remember, unit trusts have various investment options where if money markets aren't performing well, and your risk appetite is high, you can shift to real estates.
T. Bonds are best for those who already have made some money but unit trusts is for starters or those still hungry to make more and have a lot of responsibilities at hand. You make one account of an emergency fund with zero risk appetite, another school fees account with 2 risk appetite and make capital accumulation investment of 5 or above risk appetite.
Happy investment my colleagues
That's my opinion