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Term deposits - not the only story in town


Peter Fullerton

Peter Fullerton

Senior Credit Analyst

Many commentators advocate shopping around the banks for a better mortgage interest rate. This same principle of shopping around also applies when investing funds in a bank by looking at the various parts of the capital structure to gain a more attractive rate of return. There are a multitude of instruments issued by banks (and corporates) that sit between bank deposits and equities on the capital structure spectrum, offering a yield which can be higher than a term deposit but with potentially more capital stability when compared to the issued shares. However, a large number of these opportunities are only available to institutional investors, including Schroders, and cannot be directly acquired by individual investors. In this article, we look at the benefits that selectively accessing these opportunities can provide to the Schroder Credit Securities Fund.

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