An interesting article by XTB looking at how an official RBA cash rate rises isn’t likely to happen anytime soon. Earlier this year financial analysts/ economists predicted that there may have been a rate rise late in 2018, early 2019, however this has now been pushed out with an expectation that this may now occur in late 2020. As the official RBA cash rate sets the tone for the financial industry’s deposit and loan rates, this is good news for borrowers (as lending rates will remain low) however not so good for investors sitting on cash with low rates likely to continue.
The article offers an alternative for investors currently sitting in cash in the form of corporate bonds and highlights the differences in relation to risks, returns and liquidity. At PE Capital, we offer the Monthly Yield Fund that includes XTB corporate bonds so are already advocates of this alternative solution.
If you would like to know more then please visit us at www.pecapital.com.au or call as on 03 9081 0633.