Emirates NBD to offer fractional bonds to individual investors

Image: Emirates NBD

Emirates NBD has introduced fractional bonds for individual investors, allowing them to gain access to international bond markets with a minimum investment as low as $25,000. This move makes it among the first banks in the region providing such a service.

The international bond market generally holds a minimum investment of $200,000 for fixed income bond securities, often making entry difficult for retail investors.

Benefits of fractional bonds

The introduction of fractional bonds will benefit investors looking to access a new asset class with smaller investment amounts, allowing them to benefit from an alternate income source.

Fractional bonds offer investors several advantages, including opportunities for diversification, allowing them to spread their risk across various bond issuers, sectors and maturity periods, thus helping to enhance the stability and resilience of their investment portfolios.

Through fractional bonds, individual investors according to their classification, can build customised bond portfolios that align with their investment goals and select bonds based on their risk appetite, desired yields, credit ratings and other criteria, tailoring their portfolios to meet their unique needs.

Further, fractional bond investors can liquidate their bond investments by selling their holding back through the bank, ensuring they have the ability to access funds when required.

Marwan Hadi, group head, Retail Banking and Wealth Management at EmiratesNBD, said: “Complementing our existing strong wealth management offering, we are pleased to be one of the first banks in the region to introduce fractional bonds, which will benefit retail investors looking to grow and diversify their portfolios by overcoming the challenge of the high barrier to entry.

“We believe fractional bonds will revolutionise the way investors engage with fixed income investments, enabling them to leverage the benefits of bond ownership while mitigating risk.”

Ammar Al Haj, group treasurer and head of Global Markets at Emirates NBD, added: “Bonds as an asset class are attractive in the current high interest rate climate and the introduction of fractional bonds is a significant step towards broadening the reach of the international bond market, now making it more accessible to a wider section of retail investors. The new offering will allow our customers to invest in smaller denominations, diversify their portfolios and enjoy the benefits of alternate income.”

In recent news, the bank introduced compliant carbon market trading and announced it will transform operations using generative AI.

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