FAQs
What are fractional bonds?
Fractional bonds allow investors to purchase a portion of a bond rather than buying the whole bond. By lowering the minimum investment amount, bond investing becomes more accessible to a wider pool of investors.
How do fractional bonds work?
Fractional bonds work by dividing a full bond into smaller units, allowing investors to buy these smaller pieces. The returns and interest payments are proportional to the fraction of the bond owned.
What is the minimum investment required for fractional bonds?
A nominal of USD 50,000.
What are the benefits of investing in fractional bonds?
Lower minimum investment thresholds.
Diversification across different bonds with a smaller investment.
Access to bonds that might otherwise be too expensive for individual investors.
Who can invest in fractional bonds?
Fractional bonds are available to both retail and institutional investors
Are fractional bonds safe investments?
Like any investment, fractional bonds carry risks. The safety of the investment depends on the credit quality of the bond issuer and market conditions. However, bonds are generally considered lower risk compared to other asset classes such as stocks.
Can I sell my fractional bond before it matures?
Yes, in many cases, fractional bonds can be sold on secondary markets before maturity, but this depends on the market liquidity.
How are interest payments handled with fractional bonds?
Interest payments on fractional bonds are made proportionally to the fraction of the bond you own. These payments are credited to your investment account with SICO.
What happens when the bond matures?
When a fractional bond matures, you receive the principal amount proportional to your ownership, along with any remaining interest payments.
Are there any fees associated with buying fractional bonds?
Fractional bonds are subject to an execution of 50 bps (0.50%) on notional amount or USD 500, whichever is higher. The fees are subject to 10% VAT charge. The bond is also subject to a custody charge of 15 bps (0.15%) per annum charged quarterly on the market value of the bond.
How do I start investing?
If you're already a SICO account holder, simply email us at globalmarkets@sicobank.com. If you don't have an account yet, you'll need to open one with SICO before you can begin investing.
To open a new account, visit our website www.sicolive.com from your desktop or iPad and click on the ‘get started’ button. Upon completing your registration and submitting all the required documents by email, our Client Relations team will review your application and revert with the status at the earliest.
