ii welcomes greater access to three corporate bonds for retail investors

Following a recent update from the London Stock Exchange Group (LSEG), retail investors have greater access to three corporate bonds, which will be available on interactive investor,the UK’s leading flat-fee investment platform.

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The LSEG has reduced the minimum investment for three of its bonds from £100,000 to £1,000 – a great starting point that gives these corporate bonds a more accessible entry point for retail investors.

One of the bonds (YX37), originally issued by LSEG itself, matures in 2030. The other two bonds are issued by one of its entities, LSEG Finance. One (XN10) matures in October 2028, while the second (XW28) has a maturity date in September 2032.

The three bonds are now available to trade.

John Dobson, Head of Investment Solutions at interactive investor welcomed the news, saying: “The recent vote to lower the minimum denominations is a great first step towards democratising fixed income. This is hopefully the first of many more to come, as the market continues to remove structural barriers that have historically limited access to institutions.

“It’s an exciting development, and a practical change that brings more corporate bonds within reach of far more retail investors

“At interactive investor, we’ve long championed giving retail investors the same seat at the table as institutional investors. For our customers, this is ultimately about choice and control; being able to access all relevant corporate bonds alongside shares, funds, and exchange-traded funds (ETFs), in one place, and use fixed income as part of a more diversified portfolio. This is why we continue to up our game on editorial content and multi-media to help investors navigate the changing fixed income market, and where the opportunities may be.”

How corporate bonds could fit in your portfolio

Kyle Caldwell, Funds and Investment Education Editor at interactive investor, says: “As part of a well-diversified portfolio, the role of bonds is to provide a strong backbone to cushion against periods of stock market weakness. However, for far too long, it has been a costly process for investors who want to invest in company bonds. Most investors have been priced out, with minimum investment amounts typically standing at £100,000.

“The declines in minimum investment amounts for corporate bonds is a game changer as it increases the investment tools that retail investors have at their disposal.

“As ever, diversification is key, and while it is very early days, over time as the market matures investors will have more bonds to choose from and then potentially be able to spread risk far and wide by owning a range of corporate bonds alongside other assets – such as funds, ETFs and individual shares.

“Ultimately, education is key and it is important that investors do their homework on how bonds work and how they are influenced by the economic environment, particularly interest rates. For corporate bonds, it is also important to take a view on risks versus potential rewards. Investing in corporate bonds requires just as much scrutiny of a company’s financial position as investing in shares in order to take a view on its creditworthiness.”