Bonds investing 06 Feb 2024

A look at current Treasury bills (T-bills) and Government bonds (G-Secs)

Here are the current yields on Treasury bills (T-bills) and Government bonds (G-Secs). The entire yield curve looks flat.

In other words, the difference between the yield on shorter-maturity bonds and longer-maturity bonds is negligible.

What does this mean? Broadly, you can assume two things:

– Since there’s no duration premium i.e., you are not getting a higher yield for investing in longer maturities, you can stick to shorter-duration bonds.
– If you expect interest rates to go down going forward, you can lock in the yields on the longer-duration bonds. If and when the interest rates fall, you stand to make capital gains.

In case you missed it, you can invest in Treasury bills (T-Bills), Government bonds (G-Secs) and State Development Loans (SDLs) on both Kite web and the app. Just click on “Bids” and then “Govt. securities.”

Check this post on TradingQnA for an explainer on bond basics.