Really?
What are you comparing to?
Yes.is the inverse also true
Yes.Of course there is exchange rate risk.
No.here we find a very rare animal - almost guaranteed capital gains.
I suppose you're right.Yes.
No.
In summary, madness.
It depends when you purchased them, but the yields look ballpark. The yield on .90015 should be higher than on .905 and the fact it isn't is down to the dates of purchase. I attach a spreadsheet to enable you to do the calculations. I didn't put in any costs so that is up to you.Hi all,
I have managed to to purchase some bonds (Ireland 2027, 0.2% coupon) via DeGiro since earlier in the year. Based on a price of .90015, .905 and .9036, I figure an annual rate of return of 2.82% 2.98% and 2.95% respectively assuming I hold it until 15 May 2027. This includes picking up the dividend for 2024, 2025, 2026 and 2027 and deducting all taxes and fees from Degiro (2.50 per annum plus the 9.00 in purchasing in three tranches).
Does this look right to you?
Best,
Opus2018.
Hi Duke,It depends when you purchased them, but the yields look ballpark. The yield on .90015 should be higher than on .905 and the fact it isn't is down to the dates of purchase. I attach a spreadsheet to enable you to do the calculations. I didn't put in any costs so that is up to you.
You done better than me and those fees are incredible - I paid Goodbody .40% commission plus their annual fee of €200 + VAT to open an account. But I am old fashioned, I just wouldn't feel comfortable with De Giro which I know is very irrational.
I don't think it's irrational when making a large purchase, especially since with DEGIRO you will purchase the Irish government bonds on the Frankfurt exchange, where they have 0 volume most days, compared to on the Irish stock exchange with a traditional broker, where the volume is in the millions. While the price is about the same whenever I check it, I can imagine that you might have to pay more than 0.4% higher than the ISE price for a large purchase. I dearly wish one of the discount brokers would allow you to purchase bonds on the ISE. Maybe if enough of us write to DEGIRO (clients@degiro.ie) to ask for it, it might happen.I just wouldn't feel comfortable with De Giro which I know is very irrational.
I am not 100% sure on this.Looking at the 3.40% Treasury Bond 2024 (IE00B6X95T99), maturity is 18th March 2024. Currently trading at €99.93. Am I right in saying that on the 18th March 2024 it will mature and repay €100 and pay a coupon the same day of €3.34 per unit? The diff between €100 and €99.93 is exempt of CGT and the €3.34 needs to be declared for income tax?
In theory if this was bought within a Ltd company, how would it be taxed?
Of course you are correct, that most be the case. I assume that you pay the accrued interest when you buy the bond?I am not 100% sure on this.
I think the €99.93 is what's called a "clean" price. That means you have to pay accrued interest on top. Otherwise 3.4% over 5 months would look like over 7% p.a.; can't be right.
I think interest income for a company would be taxed at 25% and the capital gain would be tax free.
Yes, I would think absolutely that would be the case.Of course you are correct, that most be the case. I assume that you pay the accrued interest when you buy the bond?
Can you deduct that from the 3.4% for tax purposes?
Did you negotiate them down from your earlier rate, or do they charge less on French government bonds?.30% GoodBody commission
I would be grateful if you described the process. Do you call, identify yourself, say you want to place a limit order for a quantity X of CUSIP Y at price Z, ensuring that you have enough cash in your account to pay for that plus the Goodbody fee plus any accumulated interest on the bonds, and that's it? Since you found the experience comforting, does that mean that they are pleasant to deal with, rather than giving the impression that they regard "retail investors" with disdain?Although I am execution only, it was comforting to be talking to Goodbody people over the phone
I did a bit of negotiation on my first deal which was an Irish govie which they dropped from .5% to .4%. I subsequently bought GB and French govies and .3% seemed to be the rate without any negotiation.Did you negotiate them down from your earlier rate, or do they charge less on French government bonds?
You call and take option 1 - place a trade. Answered almost immediately on first name terms. You give your Goodbody reference number and a few personal details. I then simply asked them to buy as much of a particular govie as is in my cash account, which I will have topped up that day by an AIB to AIB transfer. I tell them the price that I am looking at on screen, just to make sure we are talking the same bond, but I give them no directions as regards limits. I have always (3 times does not make a summer, I guess) got at least as good as the price I saw on screen. Within about 20 mins I see the transaction has been enacted on my online dashboard. Stone age compared to De Giro, I know, but I do like the human touch, I am not a millennial.I would be grateful if you described the process. Do you call, identify yourself, say you want to place a limit order for a quantity X of CUSIP Y at price Z, ensuring that you have enough cash in your account to pay for that plus the Goodbody fee plus any accumulated interest on the bonds, and that's it? Since you found the experience comforting, does that mean that they are pleasant to deal with, rather than giving the impression that they regard "retail investors" with disdain?
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