Today's Moves

I bought more corporate bonds. This time in Royal Bank of Canada and Welltower. These were the highest yielding investment grade bonds that I could actually buy that mature in April. $US25k in one and $US35k in the other. Not ideal, as the commission is higher for the first $10k but those were the amounts on offer. I was looking to buy bonds of Siam Bank Corporation, but the minimum purchase turned out to be $US200k for some reason. I also tried to buy Glencore bonds, but when I put my bid in the market, the offer disappeared from the screen. I waited a while and I didn't get the bonds. Very weird. Probably it makes sense to wait until I have enough cash to buy $US100k and buy Treasury bills unless there is a sufficient amount of corporate bond with a high enough yield to make it worthwhile. After commissions these two purchases probably end up breakeven with a Treasury bill. As I begin to buy bonds at longer maturities though, the commission will be spread out over a longer period. I use the bond scanner provided by Interactive Brokers to find available bonds with the right characteristics.

I also am looking at shifting our allocation in the PSS(AP) superannuation fund from 50/50 "balanced" and "aggressive" to 100% balanced as part of our general de-risking. I am again reminded of how shocking the lack of transparency about investments is for Australian funds compared to US funds. All the information they provide in the annual report is the percentage of the fund allocated to "equities", "alternatives" etc. with no further details. PSS(AP) actually used to provide more, but not a lot more, information than this. An interesting fact from the annual report is that employer contributions totaled $A1.154 billion and employee contributions $A55 million in the 2017-18 financial year. Not many people are making additional contributions or they are not making very large contributions. This makes sense as the employer (the Public Service) contributes 15.4% on top of the official salary to the fund. It's only interesting because for the defined benefit fund at Australian universities – not part of the public service, though they are in the public sector – employees are required to contribute 7% on top of the employer 17% in order to get full benefits. I opted out of the defined benefit fund. Our employee contributions at PSS(AP) are actually as big as the employer contribution at the moment.

P.S.
Basec on reading the Unisuper report, employee contributions might only include non-concessional or "after tax" contributions and not salary-sacrificed or "pre-tax" contributions. This is because the stated contributions tax in the report is 15% of the employer contributions. By contrast with PSSAP though, Unisuper defined contribution members make massive non-concessional contributions (see p52 of the report), even though the employer makes 17% contributions to the fund.