Bonds are all the rage at the moment and can be an excellent addition to anyone’s portfolio. However, compared to mainstream investments they often get overlooked as you have traditionally needed big pockets to get involved. WiseAlpha has been pioneering the concept of fractional investing making corporate bonds more accessible. As it’s been nearly five years since we first featured WiseAlpha, I caught up with Rezaah Ahmad, the CEO and founder of WiseAlpha, a fractional bond investing platform.
Video
Podcast
We discuss the concept of fractional bonds and the opportunities they provide for retail investors. Rezaah explains that WiseAlpha has seen increased demand during times of market stress and high yields and why WiseAlpha has expanded into white-label services and partnerships with wealth managers and institutions.
Rezaah highlights the lack of interest in bonds among UK investors and the need for education and media coverage to raise awareness. He emphasizes the importance of diversification and gradually building a bond portfolio. Rezaah also shares his insights on the current bond market environment and the potential for future opportunities.
Key Takeaways
- WiseAlpha is a fractional bond investing platform that allows retail investors to invest in smaller chunks of high minimum denomination bonds.
- During times of market stress and high yields, there is increased demand for fractional bonds from existing investors looking to take advantage of opportunities.
- WiseAlpha has expanded its services to include white-label partnerships with wealth managers and institutions, aiming to broaden access to the corporate bond market.
- UK investors have shown less interest in bonds compared to the US, possibly due to a lack of supply and education about bonds.
- Education and media coverage are crucial for raising awareness and interest in bonds among retail investors.
- The current bond market environment, with higher interest rates and uncertainty, presents opportunities for retail investors to diversify their portfolios and generate income.
- Popular bonds on the WiseAlpha platform include gilts and high-yield corporate bonds with attractive yields.
- Bond refinancing presents opportunities for investors, especially in the short to medium term, with high-yield bonds offering potential capital appreciation.
- Bond investments tend to be sticky, with investors preferring to hold bonds until maturity to receive predictable returns.
- Direct bond investing can offer more control and potentially higher returns compared to investing in funds, as long as investors diversify their portfolios.
- Top three tips for successful bond investing: 1) Sign up for bond education resources, 2) Start with companies you know and understand, and 3) Gradually build your portfolio and consider risk-reward balance.
- WiseAlpha aims to become a trading venue and expand into international markets, offering fractional bonds and broadening access to foreign-denominated securities.
Talking Points
00:00 Introduction to WiseAlpha and Fractional Bond Investing
04:05 Expansion into White Label Service
08:38 Increasing Interest in Bonds from Wealth Managers and Institutions
09:15 Reasons for UK Investors’ Lack of Interest in Bonds
13:14 The Importance of Education and Media Coverage for Bond Market Awareness
16:04 Changing Market Environment and the Attractiveness of Bonds
18:35 Popular Bonds on the WiseAlpha Platform
21:23 Opportunities in the Bond Market due to Bond Refinancing
24:01 Sticky Nature of Bond Investments
26:01 Direct Bond Investing vs. Fund Investing
27:56 Top Three Tips for Successful Bond Investing
31:58 Future Plans for WiseAlpha as a Trading Venue and Expansion into International Markets
Rezaah Ahmad is CEO of WiseAlpha
Richard is the founder of the Good Money Guide (formerly Good Broker Guide), one of the original investment comparison sites established in 2015. With a career spanning two decades as a broker, he brings extensive expertise and knowledge to the financial landscape.
Having worked as a broker at Investors Intelligence and a multi-asset derivatives broker at MF Global (Man Financial), Richard has acquired substantial experience in the industry. His career began as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson), following internships on the NYMEX oil trading floor in New York and London IPE in 2001 and 2000.
Richard’s contributions and expertise have been recognized by respected publications such as BusinessInsider, Yahoo Finance, BusinessNews.org.uk, Master Investor, Wealth Briefing, iNews, and The FT, among many others.
Under Richard’s leadership, the Good Money Guide has evolved into a valuable destination for comprehensive information and expert guidance, specialising in trading, investment, and currency exchange. His commitment to delivering high-quality insights has solidified the Good Money Guide’s standing as a well-respected resource for both customers and industry colleagues.
