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  1. #11
    Advanced Member BIRMANBOY's Avatar
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    Depends on the timing...AIR010 is paying 6.9% as a bond but 3.85% as a share. Infratil is share dividend of 3.33% but returning 6.75% to 8.5% as a bond. Trust Power is 8.4 and 6.75% as bond and as a dividend share is 5.48%. All at current prices share prices and assuming you got bonds at application. However if you owned shares at lower prices could be comparable. I like to have a wide range of shares and bonds since if the proverbial faecal matter hits the oscillating wind generator I dont want to be cut up and buried in the back yard by my wife. I dont like to spend all my time following and tweeking my portfolio so I try and follow a system of do it right first and then leave it alone. I dont need the interest or dividends at the moment so it all gets re-invested periodically but with shares I am fussy about what price i pay...at the moment I have a sizeable cap gain sitting because of low holding price mostly. Problem with this is of course that it means opportunities are few if I use my holding price as a benchmark. Bonds are usefull for this as new ones pop up everynow and then. IFT recently had one at 6.75 so good timing.
    Quote Originally Posted by CJ View Post
    Whats your view on holding bonds in companies like the ones you mention (ie. "safe" infrastructure companies), verses holding the shares in those companies where the Dividend yield is probably similar.

    Note: I am not at the stage where I need the income from my investments other than to reinvest.
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  2. #12
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    Quote Originally Posted by BIRMANBOY View Post
    Trust Power is 8.4 and 6.75% as bond and as a dividend share is 5.48%.
    Aren't you comparing gross and net yields there. Dividend yield is net 5.48% but gross yeild is 7.5% which puts it right in the middle of what I assume are the gross yeilds from the Bonds.

    AIA, VCT and CEN are all yielding under 4% (lower than their respective Gross dividend yeilds) if bought on market so they were obviously issued during happier times for Fixed interest investors: https://www.asbsecurities.co.nz/rw/e...edInterest.pdf
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  3. #13
    Advanced Member BIRMANBOY's Avatar
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    I use declared dividends as benchmark....prior to imputation credits..as far as I can see that is what TP has on their website. This is comparable to gross yield on bonds before tax...unless Trust Power has declared a net dividend? Problem is its sometimes difficult to ascertain whats what. Re AIA etc Yes as interest rates drop more people are willing to pay premium for older higher yielding bonds so current yield can be unattractive..to me anyway. However someone must be buying them?
    www.dividendyield.co.nz
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