How to find a bond to invest?

You have decided to buy some Government bonds but where do you start? Which Country to invest in? What risks are you willing to take? What return do you expect? Is the bond overpriced or good time to buy?

One of the best tool I find is provided by Interactive Brokers inside the TWS client. Note that it is quite confusing with IBKR how to find these tools. There are 3 clients for IBKR, Web Client, Mobile Client and Desktop Client (TWS). This Bond Scanner is only available in TWS. You can find like in the screenshot below

Then you need to set your filters as below for Non-US Sovereign Bonds

I have setup three filters in this example. Maturity Date is at least 2030, Currency is in USD and Provides a min 6% yield. I have also selected “Include bonds without quotes” because some of the bonds are not very liquid. You can see the search results below;

For example you want to get more info about the top one SV is El Salvador Government, drag SV into your Watch List then right click and choose Financial Instrument Info. You will see details about the bond as below;

After that I always check the credit rating of the country from https://tradingeconomics.com/el-salvador/rating and you will see it is B-, C so stay away from this bond! My comfort level is up to B rating, I stay clear from B- or below.

Another alternative bond searching place is http://cbonds.com/bondsearch/ but you have to pay for membership to this site and it is not cheap! I had a trial account and used it for a while. Let me show you how that looks like. I have set the same filters in CBONDS as we did in IBKR.

Cbonds gives you a great advantage by giving you the option to choose agency ratings in your filters. So you can filter out the junk bonds easily. IBKR does not provide this info.

At the time of my search, result was a bond from Kenya that matched all the filters. You can review that bond details here. I hope you have a better understanding on how to search for a bond now.

Leave a Reply

Your email address will not be published.