Standard Chartered Bank is your best choice for investing in foreign bonds!

Diversified bond products to meet your Investment needs.

Currently, there are hundreds of bonds for investors on SCB platform, products with various denominated currencies or tenors. Investors could build portfolio based on your investment needs and risk tolerance, supporting you to easily manage your investment portfolio.

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Through Standard Chartered global trading platform, there are plenty of bond products from various countries worldwide. Not only does this provide you with Abundant choices, but it also offers competitive trading prices.

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Elite research team ensuring strict oversight.

Standard Chartered Bank utilizes the network of nearly sixty markets and research teams worldwide. They conduct in-depth market research and rigorously evaluate and select relatively robust bond products.

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Introduction to Foreign Bonds

What is a foreign bond?

A foreign bond is issued by foreign entities such as corporations, governments, financial institutions, multinational organizations, and others to raise funds for various financial needs. The issuer is obligated to make regular coupon payments and repay the principal amount to the investors at maturity.

Why do smart investors invest in foreign bonds?

Stock markets can experience significant volatility during market turbulence, leading to extreme price fluctuations. While interest rates and inflation can affect bonds, Bonds price movements are generally less extreme than stocks. Holding bonds carries lower risk than holding stocks of same issuers, because, in the event of a bankruptcy, bondholders have a higher priority in receiving repayment compared to shareholders, increasing the chances of receiving compensation of principle.

Types of foreign bonds to purchase:

–Fixed Rate Bonds

  • The most commonly issued type of bond in the investment market.
  • The issuers pay a fixed amount of interest to investors based on the coupon rate within a specified period.

–Floating Rate Notes

  • The coupon rate is adjusted dynamically based on the reference rate plus a certain spread, so the Amount of coupon is not fixed.
  • The reference rate is typically a credible market benchmark interest rate, such as the prime lending rate or treasury bond rate.

–Zero-coupon Bonds

  • The issuers does not pay interest during the holding period.
  • These bonds are typically issued at a discount to their face value and redeemed at face value at maturity.
  • The investment profit is the difference between the redeemed face value and the discounted subscription price.

Must-know factors that can affect bond prices:

–Interest rate risk

  • Market interest rates is the key factor of bond price volatility.
  • In theory, bond prices and market interest rates have an inverse relationship.

–Maturity risk

–Credit rating

  • Bonds with higher credit ratings (lower risk) tend to have smaller price fluctuations and relatively lower yields.
  • Bonds with lower credit ratings (higher risk) can experience larger price fluctuations and relatively higher yields.

–Coupon rate

  • Bonds with lower coupon rates tend to have larger price fluctuations.
  • Bonds with higher coupon rates tend to have smaller price fluctuations.

–Other factors:

In addition to the main factors mentioned above, market supply and demand, inflation , FX rate fluctuations, political risks, speculative activities, and other factors can also impact bond prices and yields.

Risk Disclosure Statement of Foreign Bonds Investment

Market risk: Bond values are determined by the credit rating of the issuer, credit spread, and market interest rate, while bond income is determined by the fixed income or capital gains on rising bond prices. Based on the issuer’s credit rating, there may be differences in the security and volatility, and investment returns and risks can also vary because of market performance.

No maturity risk: If the investment target is perpetual securities with no maturity day, unless otherwise agreed, the issuer is not obligated to redeem such securities, and the Investor has no right to request the issuer to redeem such securities.

Issuer’s early redemption risk: If the issuer exercises the right to redeem bonds earlier, it will shorten the expected investment period.

Reinvestment risk: If the issuer exercises the right to redeem bonds earlier, the Investor will have reinvestment risks from reinvesting the investment principal along with accumulated interest in other appropriate products with similar return and maturity.

Investor’s early redemption risk: If a bond is not involved in any default, the issuer will redeem 100% return of the bond face value based on the product terms on the maturity date. If the Investor intends to redeem bonds earlier, the redemption must be processed at the actual deal price then on the secondary market, which may lead to a loss of principal. Therefore, if the Investor chooses to perform early redemption when the market price is falling, the Investor may suffer loss(es).

Interest rate risk: The marked-to-market value within the duration of bonds could depend on the interest rate changes of the issuing currency; when its interest rate rises, the marked-to-market value of the bond may decrease and incur losses to the original investment amount; when its interest rate falls, the marked-to-market value of the bond may rise accordingly and thereby bring extra gains.

Coupon risk: If force majeure events occur to the issuer of the bond, the issuer has the right to decide whether to allocate interest or not for the product continuously.

Liquidity risk: Bonds may not have sufficient market liquidity. Transaction completion cannot be guaranteed for instructions of excessively low amounts early redemption. When market liquidity or transaction volume is low, a significant spread may be generated between a bond’s actual transaction price and its asset value, which may result in losses of the original investment amount if the Investor redeems the bond before its maturity. Moreover, once the market completely loses its liquidity, the Investor will have to hold the bond until its maturity date.

Credit risk: The Investor shall assume the credit risk associated with the bond issuer or guarantor (if any). Credit risk refers to a situation when the bond issuer or guarantor (if any) fails to pay bond coupon, principal, or perform its other bond duty; whereas the evaluation of “credit risk” is dependent upon the Investor’s evaluation of the credit rating of the bond issuer or guarantor (if any). Credit ratings may change. The credit rating of any bond issuer and guarantor (if any) or the bond merely reflect independent opinions on the credit values of rated entities or bonds from relevant credit rating agencies rather than guarantee of credit qualities of the bond issuer and guarantor (if any) or the bond.

Currency exchange risk: A foreign bond is an investment product denominated in a foreign currency. If the Investor invests in the bond with currencies such as TWD or one that is not the product’s denominated currency, it is necessary to be aware of the risk of currency exchange upon returning accrued foreign currency interest and investment principal of assets converted back to TWD or a currency other than such foreign bond’s denominated currency may be lower in value than the invested principal.

Country risk: If force majeure events such as wars or natural disasters occur in the country in which the issuer or guarantor (if any) of the bond is registered, such situations may cause the Investor losses.

Event risk: A major unexpected incident involving the issuer or guarantor (if any) may lead to downgrades to the issuer’s credit rating.

Settlement risk: If emergencies, extraordinary situations, market volatility factors, or changes to settlement rules on holidays occur in the country in which the bond issuer or guarantor (if any) is registered, or in the location of the exchange of the linked investmen t products, or the delivery versus payment (DVP) settlement institution, settlement will be temporarily suspended or delayed.

Inflation risk: Inflation will lead to a decrease in the bond’s real income.

Taxation risk: The taxation laws applicable to the issuer and the Investor will affect the bond Investor’s income. The Investor shall assume bond-related taxes, including (but not limited to) stamp duty or other taxes generated from the bond or charges that may be collected. Generally speaking, the issuer will not pay additional amount to compensate any taxes, expected taxes, or withholding taxes or deducted amount deducted by the issuer or the payment agencies. If there are any changes in applicable taxation laws, the bond income may fall short of expectations. The Investor shall consult his/her own tax and accounting consultant before agreeing or deciding to purchase the bond.

Possible Risk and Return if you invest in Bonds

Possible Risk and Return if you invest in Bonds

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SPECIAL ATTENTION TO BONDS INVESTMENT.


As bonds are traded in the over-the-counter market, different sales institutions have varying costs, resulting in significant differences in the quotes they offer to clients. Therefore, it is particularly important to choose a reputable and large-scale bank. With Standard Chartered’s global platform and extensive bond trading volume, you can stand on the shoulders of giants to obtain highly competitive bond quotes in the vast over-the-counter market. This allows you to acquire ideal bond targets at relatively reasonable prices. Without the need for exhaustive comparisons, Standard Chartered Bank is indeed the best choice for your bond investments.

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Product Risks

  1. All activities descriptions, product information, and documents provided are for reference only and do not constitute any form of solicitation, promotion, advice, recommendation, offer, or inducement. The detailed content, product risks, and related rights and interests of this product shall be subject to the general agreement, product prospectus, transaction confirmation, and other relevant agreements signed between the bank and the customer.
  1. The funds provided by customers for investment in foreign bonds are specific money trust investment funds and are not deposits. They are not protected by the Central Deposit Insurance Corporation’s deposit insurance. The bank (as trustee) does not guarantee the management or performance of trust business. Customers need to bear the investment risks and investment gains or losses themselves.
  1. Bond prices are subject to fluctuations. The price of any bond can rise or fall, and it may even have no market value. Investment involves risks, and customers should carefully consider and independently judge (without relying on the bank or its affiliated enterprises) whether they are suitable to participate in any investment products, based on their own risk tolerance, investment objectives, financial tolerance, investment experience condition, and other relevant conditions (including legal, tax, and accounting considerations).
  1. Investing in foreign bonds carries risks, including the potential loss of part or all of the investment principal and interest. Customers should bear various related risks, including the risk of loss of principal and interest (i.e., the issuer of the bond may not be able to or may not timely repay the principal or pay interest), market risk, foreign exchange risk, tax risk, credit and default risk, settlement risk, Issuer’s early redemption risk, Investor’s early redemption risk , potential conflicts of interest risk, leverage risk, political risk, and liquidity risk. If customers redeem the bonds before the maturity date, there is a possibility of losing the investment principal due to fluctuations in bond market prices. Additionally, there is a liquidity risk associated with the inability to redeem all or part of the invested foreign bonds promptly in case of unfavorable factors happened in the bond market. Furthermore, as foreign bonds are denominated in foreign currencies, customers must be aware of the substantial impact of exchange rate fluctuations.
  2. Past performance of foreign bonds does not guarantee future performance, and bond prices may rise or fall. If customers need to redeem the bonds in advance, the bank will assist in processing the transaction, but cannot guarantee that the early redemption of bonds by customers will always be executed.
  1. In accordance with applicable laws and regulations, the bank could withhold taxes as required at the time of payment. If tax laws change in the future, the customer’s tax liability will be handled in accordance with the relevant laws and regulations, and the actual returns of the product may differ from the initial expectations at the time of launch.
  1. Before making an investment, investors should carefully read the product Prospectus and understand the related investment risks.
  1. “For product-related fees, please refer to the “General Agreement for Account Opening” II and Terms and Conditions for Trust Account in “Standardized Contract Disclosure Area” under “Statutory Public Disclosure Items”