11Mon·

Interest payment today...

25.09

iShares € High Yield Bond ETF D

Received x106 Dividends at €2.82

€298.92

9 Comments

Charmin@Charmin

11Mon

May I ask what strategy you use to mix this into your PF? I see that the payout is around 5 percent p.a.. - which is pretty good ...

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Immo_Investor@Immoinvestor1981

11Mon

@Charmin
Hi,
My strategy is "safe wealth accumulation" without experiencing major fluctuations and sleeping peacefully.

I do this with real estate and use leverage. However, I have had to change strategy since 2018 due to ECB interest rate hikes.
When interest rates are high, I invest in bonds and take the high interest rates as income.
If the central banks lower interest rates over time, this will have a positive effect on bond prices, causing prices to rise and yields to fall.

Until we reach the trough with the interest rate cuts, I build up cash and look for real estate investments.

Otherwise, if I can't find a suitable property, passive income will continue...

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Charmin@Charmin

11Mon

@Immoinvestor1981

Thanks for the information, very enlightening. And; we are quite close to each other there. I have also bought real estate over the last few years (since 2015), but had never considered bonds as a relatively safe haven.

I am also in the process of increasing my cash position, but in case we get into a recession or a bear market so that I can buy more cheaply.

The bond ETF is now definitely on my watch list!

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Immo_Investor@Immoinvestor1981

11Mon

I normally buy bonds directly as individual investments. Last year I secured 6.38% for 10 years with Romania.
These yields have fallen.

However, high-yield corporate bonds currently yield more than government bonds and are too risky for individual purchases.
As an ETF, the risk is spread over several hundred companies and it also offers the option of buying in smaller quantities as a savings plan.

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Epi@Epi

11Mon

@Charmin High yield corp bonds are not the epitome of a safe haven. Rather a risk-on asset. The correlation to the equity market is high.

I like high yield corp bonds as a canary asset. If they suddenly fall, you should quickly look for a safe haven in the equity market.

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Smudo@Smudeo

11Mon

I have now created this in my order. 1.06% fees per year. At 5% @Charmin that's a net dividend of only 4% before tax

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Immo_Investor@Immoinvestor1981

11Mon

@Smudeo
By fees, do you mean your broker fee?

At Trade Republic I have 1 Euro at 1,.06% your investment is 94 Euro.

Otherwise the total expense ratio is 0.5%

https://www.ishares.com/de/privatanleger/de/literature/fact-sheet/ihyg-ishares-high-yield-corp-bond-ucits-etf-fund-fact-sheet-de-de.pdf

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Smudo@Smudeo

11Mon

@Immoinvestor1981
Thanks for the data sheet
So if I buy for 5000 euros now, my Commerzbank tells me the costs for 5 years holding period 278.69 Eur / 5 = 1.06 % fees per year. Are then from currently 5% dividend only 4% net

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Immo_Investor@Immoinvestor1981

11Mon

@Smudeo --> That is far too expensive... I have now checked Commerzbank charges 4.90 per order + 0.25% of the order value and probably custody fees. My main securities account is with FLATEX where I always pay 5.90 per order - at the same time I opened a securities account with Trade Republic where I have ONLY 1 Euro costs per order. In the meantime I only use Trade Republic - there are also situations where I use Flatex because Flatex gives me access to all stock exchanges.
You absolutely have to open a second custody account with a cheaper online broker.

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