Investing in bonds is once again becoming an attractive choice for investors looking for high returns. In 2021, capital inflows to the bond market recorded a significant surge, with bond funds raising 1.97 billion euros in the month of July alone and more than 13.61 billion euros since the beginning of the year (based on data from Assogestioni’s Managed Savings
Map).
However, this asset class is difficult for retail investors to access, due to the wide choice among thousands of liquid bonds on the market, the minimum investment cuts starting at 1,000 euros and the need to go through a bank or financial advisor. Despite this, bonds prove to be a robust tool for building long-term portfolios and benefiting from high interest rates
.
This is also stated by Christian Hecker, co-founder of Trade Republic, who stresses the importance of selecting the right securities and working with reliable partners to take full advantage of the opportunities offered by the bond market.
How to invest in bonds with fractional purchases in 2024
Trade Republic, the renowned savings platform in Europe, recently announced a new project aimed at simplifying access to bonds. Starting October 1, users will be able to invest in 500 liquid government and corporate bonds, even if they commit only one euro a day. The company will not apply percentage commissions on transactions, while a fixed rate of 1 euro will apply for the reimbursement of external costs for the settlement
.
With the introduction of this innovative solution, Trade Republic democratizes European financial markets, making bond trading accessible to a wide audience of investors. In addition, the platform aims to achieve a further objective, namely to bring young investors closer to the world of bond investments, also taking into account the limited returns of
recent years.
Ultimately, Trade Republic once again demonstrates its leadership in the savings sector in Europe, standing at the side of its customers and providing innovative and affordable solutions.
“There is a generation of young retail investors who have so far avoided buying bonds because of low returns in proportion to costs. However, with current reference rates exceeding 4% and the recent decision by the ECB to increase them even more, government bonds represent a solid investment option for those who want to create a balanced portfolio for the future. In addition, investors can benefit from the favorable taxation that these financial instruments enjoy. Thanks to online investment platforms such as Trade Republic, investors have the opportunity to transparently and flexibly access the financial instruments that best suit their needs, without the need to go to a branch or contact a
financial advisor.”