Welcome Address by Mr Ang Hao Yao, Honorary Secretary of SIAS at SIAS 25th Anniversary Investment Symposium on 28 June 2025

Date: June 28, 2025

Good morning everyone and thank you for attending this event which focuses on fixed income instruments, more commonly known as bonds.

It would be fair to say that bonds are not very sexy to the average investor, many of whom think that bonds are “boring’’.

Furthermore, the bond market is often perceived as being either too complex or too uninteresting for most people to consider – until they realize they actually need bonds to diversify their investments and protect their portfolios from numerous risks.

The perception that bonds are boring is a by-product of a long-term bull market in stocks brought on by low interest rates and a long period of relatively prosperous economic activity dating back to the early 1980s.

For example, US stocks within a very short space of time rebounded to near-all-time highs after the tariff shock in early April, whilst the Straits Times Index has also recouped most of its tariff-related losses in a few weeks.

Of late, the notion that bonds are boring has probably been bolstered by the appearance of cryptocurrencies, which offer very high returns – of course, together with plenty of risk.

But the reality is that in many countries, the bond market is actually the tail that wags the dog – for example over in the US where the bond market is bigger than the stock market, movements in US Treasury yields, which are influenced by movements in interest rates, tend to have a profound effect on stock prices, much more so than the other way around.

Investors who gain a better understanding of bonds and how the bond market works will therefore empower themselves with an improved ability to recognise the potential risks and opportunities that gyrations in bonds present to stocks and other asset classes.

Because bonds offer relatively safe and stable cash flows, they bear serious consideration as investments that can be used to reduce the risk of portfolios. In other words, if you think that safety, income and diversification are important, then bonds are for you.

What is a bond, really? Essentially, you as an investor in bonds are a lender, with the borrower being either a government or corporation.

So, you should put yourself in the shoes of a lender and ask yourself important questions such as: how long am I lending money for? When will I be repaid? Is the interest that the bond pays sufficient compensation for the risk associated with the borrower? Is the bond actively traded in case I need to get back my capital quickly?

And perhaps most important of all – what is the ability of the borrower to repay me? Stated differently, what is the creditworthiness of the borrower?

Which brings me to today’s event which aims to educate investors on how to evaluate bond investments and the benefits and risks associated with fixed income instruments.

The first presentation is how to assess and compare the risks associated with bonds and other fixed income products and how to evaluate the overall creditworthiness of issuers. It will also help investors understand key product features such as interest rates, maturities, and call provisions.

After a short break, this will then be followed by a presentation on “Private Equity for the Public: Understanding Astrea Bonds’’ which is an investment that has proven to be very popular since issue mainly because of its connection to Temasek Holdings.

However, if you are new to investing and lack experience, low-cost index funds might be an attractive option and a presentation on this asset class will then follow.

Last but by no mean least, we will round up the morning with a panel discussion on “The Evolving Role of Fixed Income in a Changing Economic Landscape’’ where industry experts will give their views on this important subject.

After this event, you should be familiar with how bonds work and how they can help you achieve your investment objectives. I hope this event will prove educational and useful to all.

Before I hand you over to the first presentation, a quick word about using Artificial Intelligence when investing.

It’s very likely that using AI in investing can help you make more informed decisions, manage risk and potentially boost returns – after all, robo-advisers use AI to manage investment portfolios based on risk tolerance, goals and time horizon. Furthermore, AI-powered algorithms can execute trades based in pre-defined criteria in milliseconds.

However, despite these advances, SIAS still believes there is no substitute for doing your own homework, understanding what you are buying, figuring out how returns are generated and being aware of the associated risks.

“Knowledge is power’’ has always been SIAS’s guiding principle when it comes to investor education. Who knows? Maybe after attending this event you will leave with the knowledge that bonds are not really that boring after all.

Thank you.