Key risks to consider investing in corporate perpetuals

A corporate perpetual can be able to generate potentially more returns and can seem pretty attractive compared to deposits in the bank.

However, do take note the risks that comes along with it can be significant as well. The largest risk could be the corporate might not be able to perform as what was originally planned.

Some of these perpetuals are deemed to be “safer” as it is a bond like structure. Unfortunately, there is a very large risk of non diversification.

Hyflux was considered as a “blue chip” that had great “potential” due to it’s background and ownership from even Temasek Holdings.

Of course, to Temasek, this was just a small portfolio held by the very large company and they could afford that single company risk. Most of us individuals do not have such large holdings to diversify into that many companies.

Remember, look at the downside risks before you look at the headline returns.

Speak with your experienced investment advisor to help to value add to you.

https://www.businesstimes.com.sg/investing-wealth/key-risks-to-consider-when-investing-in-corporate-perpetuals