Occasionally when I tell someone outside of my industry that I work in fixed income asset management, I can almost see the eyes glaze over before I’ve finished my sentence.
If you’ve read any of my other blog posts, you know that I find my work fascinating, but I’m also aware that the bond market has a reputation for being the safer and, therefore, sleepier sibling of the stock market. And that simply isn’t the case – bonds can be fun, too!
Okay, maybe “fun” is a subjective term. But here’s an example: I was speaking to a colleague of mine the other day about a certain type of fixed income instrument called a dim sum bond, and it got us trying to remember all the funny bond names there are out there. There are actually quite a few, and it’s partially due to the increasing globalization of the fixed income market. As more governments and companies reach out to foreign investors and issue debt in various currencies, a whole new crop of securities has arisen for bond traders to assign colorful names to.
Here are some of the more interesting names I hear being thrown around the trading floor:
Bonds named after food . . .
- Dim sum: Renminbi (RMB) bond issued in Hong Kong by a Chinese entity
- Kimchi: Non-Korean won bond issued in the Korean market by a foreign entity
- Baklava: Turkish lira bond issued in the Turkish market by a domestic or foreign entity
- Maple: Canadian dollar (CAD) bond issued in Canada by a foreign entity
- Kiwi: New Zealand dollar bond available only to New Zealand residents
Bonds named after animals . . .
- Bulldog: British pound bond issued in the UK market by a foreign entity
- Panda: RMB-denominated bond issued in the Chinese market by a foreign entity
- Kangaroo: Australian dollar (AUD) bond issued in the Australian market by a foreign entity
Bonds named after people . . .
- Yankee: US dollar (USD)-denominated bond issued by a foreign entity in the US market
- Samurai: Japanese yen (JPY)-denominated bond issued by a foreign entity in the Japanese market
For investors, this list represents new opportunities to mix and match exposures to currencies and countries. For bond geeks like my colleagues and I, this is fun trivia we can use to test each other’s knowledge. But at the very least, this could just be some interesting barbecue fodder – perhaps for the next time you meet someone who works in the bond market.
Matt Tucker, CFA, is the iShares Head of Fixed Income Strategy.