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⭐️VDO, or first tier? Which bonds to invest in?
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We asked Search with Neuro what the yield potential of bonds with different ratings is in the near future. – Everything is changing quickly, but bonds are still more profitable than bank deposits (excluding promotional fees).
There was a series of articles about the yield (premium to OFZ) offered by VDO (spoiler: +5% per annum on average in the long term)…
And what is the real yield after deducting the basic statistics (spoiler: BBB and A are the most interesting).
But what's happening now? What's the yield today? To answer these questions, we took thematic ratings of Moscow Exchange bonds.
Each index contains dozens of issues. The largest is AA (#73), the smallest is A (#18). There are special rules for assigning ratings. Because... Indices can contain rating issues. Thus, the BBB calculation base includes aviation fuel (recently upgraded to A-rating) at the maximum weight. The index has not been rebalanced yet, but I have not seen any other similar cases.
And this is what happened:
Is it worth it? - That's a good question. A series of defaults were initiated at high rates: Nika (B), Seller (B), IES Plant (BB-), RKK (B-), Rosgeologia (A-), Kuzina (B+), etc.... Basically, the credit rating will fall below BBB, but the delay in tightening monetary policy will lead to an increase in defaults and strengthening of companies. Leasing company reports showed that the quality of the portfolio will soon deteriorate.
We view the A rating as a comfortable compromise between risk and return (from A- to A+, slightly up to AA). Bonds are selected based on these ratings.
For riskier profiles (e.g. BBB) a wider diversification is required. However, finding enough companies with acceptable BBB quality is not easy. We launched the BIZumny portfolio, but in the first basic (NIKA) it made us an outsider. Well, it is frankly inconvenient to have such a large amount of money in such an unreliable portfolio.