Check SGS Prices
SGS prices may go up or down according to market conditions, although you will always receive the face (par) value at maturity.
You can monitor the performance of your SGS by:
- Viewing SGS bonds statistics and T-bills statistics.
Calculating SGS Bonds Returns
There are a few ways to calculate the returns from investing in SGS bonds: capital and interest gains, current yield, and yield to maturity. You can use the SGS Bond Calculator to calculate yield to maturity, which is the most widely used return measure.
Capital and Interest Gains
Use for: A simple way to count your gain or loss from your initial investment.
How to measure: Sum of capital and interest gains as a percentage of the purchase price.
Example
If you bought a 10-year bond paying 4% coupon with a face value of S$100, you will receive semi-annual interest of:
(S$100 x 0.04 /2) = S$2
Assume that you bought the bond at a primary auction at S$100 and sold it one year later. Depending on the price, the return will be as follows:
| Price | Calculation | Capital and interest gain |
|---|---|---|
| S$102 | (102-100)+4/100 *100 | 6% |
| S$98 | (98-100)+4/100 *100 | 2% |
If the bond was a reopened bond instead of a new issue, it might have a different selling price from its face value.
Assuming you bought the bond at a price of S$105 and sold it a year later at $103, the return would be:
(103-105)+4/105 *100 = 1.90%.
Current Yield
Use for: Measuring annual returns. It allows you to estimate the return from investing in this bond versus other bonds on the market.
How to measure: Annual interest as a percentage of current market price.
Example
For a 10-year bond with a 4% coupon, the current yield may be above or below the coupon depending on the current market price:
| Current market price | Calculation | Current yield |
|---|---|---|
| S$98 | (4 / 98 x 100%) | 4.08% |
| S$102 | (4 / 102 x 100%) | 3.92% |
Yield to Maturity
Use for: Estimating your returns should you hold your SGS bond to maturity. Use yield to maturity (YTM) to compare the profitability of bonds with different maturity periods.
YTM is the most widely used return measure in the bond market. It measures the total return generated from holding the bond to maturity, including the coupon income, the capital gain or loss, and returns from reinvesting all coupon payments.
It is thus a more thorough way to calculate your returns from a bond.
How to measure: Use the SGS Bond Calculator to calculate the yield to maturity of your bond.
Calculating T-bill Returns
T-bills do not have coupon payments; instead, they are issued at a discount. Therefore, the yield that you get at maturity is the difference between the purchase price and the face value.
Example
If you pay S$95 for a 1-year T-bill with a face value of S$100, your yield is:
(S$100-S$95) / 95 x 100 = 5.26%