Understand the nuances of retail direct bond before investing: Experts

Be aware that it carries credit, interest-rate, and liquidity risks and makes diversification difficult

Several new platforms have been launched in recent months that allow retail investors to invest directly in bonds like Bondskart.com from JM Financial, BondsIndia.com, and the Reserve Bank of India’s Retail Direct Scheme.

However, as Juzer Gabajiwala, director, Ventura Securities, says: “While the opportunity has become available, retail investors need to ask themselves whether they understand the nuances of direct bond investing.”

Customise by going direct

Investors keen on building customised bond portfolios may want to invest directly. Some may, for instance, want to allocate some money to instruments like market-linked debentures. Others may want to venture into lower-rated bonds (‘A’ and ‘BBB’)