German Bonds for Dummies

Having half my str fund in NR and just taken the other half out of the NTMA as the rates are pathetic i was looking at german bonds as a safe haven.Would have little faith in the irish government guarantee,so think german bonds would be a reasonable secure investment. Would appreciate a idiots guide to inventing in german bonds.

A big thankyou to anyone who has the time to and knowledge to reply.

Here’s an interesting story about German Bonds. Link.

Mightn’t interest you though…

I’d start here…

deutsche-finanzagentur.de/cln_117/nn_105538/EN/InstitutionalInvestors/GovernmentSecurities/Federal_20bonds/federal-bondsII__inhalt.html

then open a basic trading a/c with a broker to buy the bonds.

Thanks but as a complete novice to bonds i’m still slightly confused.

A couple of questions if you will.

  1. What kind of interest do they pay ?Is it fixed or variable ?
  2. Are they easy to buy and sell ?
  3. Do you have to hold them for a fixed period ?Are they a longterm or shortterm investment ?
  4. Do you hold them personally or the broker ?What happens if broker goes bust ?
  5. Can you only buy through a broker ?
  6. What sort of charges does buying and selling incur ?

Really what i’m looking to do is spread my risk and i’m wondering are bonds a good part strategy in the medium term ?

Live,work,paid in ireland. 10% net worth on deposit in ireland.
40% on deposit with HM treasury (NR)
10% on deposit Dutch (rabo)
Looking to diversify the other 40% ?

Don’t want currency risk, property or shares in the current climate as risk to great atm.

Are bonds the way to go or what are others doing ?

Not sure on answering the above re: bonds, but physical gold and silver should form part of your diversification strategy.

Do you not pay way over the odds to hold physical metals though ?Where would you even get them in ireland ?Can you get them up north,maybe worth a look with currency difference ?
I’d have serious reservations about these broker dealers that hold it for you,as its wide open to manipulation,selling more than they physically hold.You would only find out when the whole thing went tits up.Sadly trust in the current enviroment is non existant,too many wide boys out there swimming naked afaic.
I did well out of mining funds before the commodity bust.where was gold 6mths ago ,12 months ago,where is it now ?

Variable. Around 4% last time I looked.

Completely liquid. The day that the market for german government bonds becomes illiquid is they day you break out the shotgun and the crates of beans.

Can be bought or sold just like shares.

Take physical possession and make sure you are registered with the relevant german authority as the holder.

In Ireland, yes.

Depends on the broker but expect an annual fee of around 60E for your trading a/c and commission of .5% or more for the transaction. Brokerage is another of the interlocking monopolies in Ireland so its not cheap.

You are buying security not returns. Return of capital rather than return on capital. The Irish banking system is currently insolvent so until the ECB or IMF take over and properly liquidate and recapitalize the system I’d keep a safe distance.

It seems to me that you can deal with the German state directly, and even set up an
Internet banking account with them.The only charges to be paid are the ones by YOUR bank for money transfers
to and from this German account. Here is some information by the German government agency
in English:

deutsche-finanzagentur.de/EN/Home/

However, they say that correspondence and most forms will be in German only.

EDIT: sorry, I overlooked that jmc had already provided a similar link (albeit to the institutional investor subsection).
My point is that as a private investor you should be able to open an account in your name, free of charge and accessible via
internet, i.e. a broker is not needed. The way it works for the average Hans: one fills in the web form with address and account details (of a German bank account), then one prints it out, signs it. Second one needs to authenticate one’s signature, which can be done in any post office in Germany using the form provided. This then has to be sent by mail to the German government agency, and that’s it. Now one would need to find out what else is needed for non-residents, in particular someone without a German bank account but I am pretty sure it is possible.

Pretty much the same way you buy Gilts if you live in the UK. But outside the country or origin, and more importantly in a country like Ireland with no competition in professional services, you have to use a broker and pay a lot for the honour.

I’m sure you could if you “Sprechen Ze Deutsche?” ,unfortunately i don’t so doesn’t seem possible.

Some great info there thanks,did you try to buy through any of the german banks operating in Ireland/IFSC by any chance ?
Once you set up you brokers a/c ,how long does it take to purchase/recieve the bunds ?

My family members went through a broker as it was for personal savings rather than a business investment. My guess is that for more serious six and seven figure sums a direct relationship with a german institution might be cheaper.

I have not checked in recently for an update but I believe the transitions have all gone through so it was a matter of days. Do know about physical delivery or confirmation of registration. I’ll find out how that end went.

I would be interested in information on dealing with German institutions direct - travelling to Germany if necessary. Even for small amounts I’d prefer to avoid local brokers

They weren’t the most helpful the last time I had to deal with them, but you could give the commercial section of the German Embassy a call.

dublin.diplo.de/Vertretung/d … 94182.html

Anyone got any thoughts on this Rabodirect fund as a relatively painless way of investing in (mostly) German government bonds?

Edit or this fund seems to be mostly Euro term deposits (“termijn”) with some government bonds in the mix…

Long time lurker in need of help. Did the OP manage to buy German Bonds, and if so how?

BTW great forum… thanks to all the stuff I’ve read here I actually have some money to buy German Bonds.

Did not purchase yet due to :

  1. Excessive stockbroking fees
  2. Coupon interest charged at 41% if you are a higher rate taxpayer

Have funds in uk euro A/c in shortterm,but keeping a very active eye on sterling and where it’s going,am actively looking for alternative european mainland options that don’t incur such costs.

Would be interested in any views,maybe if a mod wanted to make a stickie and change the thread name, maybe “alternative euro deposit options” ?

Thanks for the reply. Mad stuff going on around me here… I know of one person who has buried money in the garden. So any suggestions would be greatly appreciated.

Where’s the garden? :laughing:

Every clould has a…