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OFZ are the most demanded and liquid securities on Russian market bonds. They are characterized as the most reliable and stable. Foreign investors show the strongest interest in them. In this article, we will talk in detail about the OFZ market: what are their types, what are the features of this type of bonds, how to purchase them for individuals.

1. OFZ - what is it in simple words

OFZ(federal loan bonds) are debt securities issued by the Ministry of Finance of the Russian Federation to cover budget expenditures (they are also called "government bonds" or government bonds). Issued since 1995 in rubles (less often in dollars)

In fact, OFZs are ordinary bonds issued by the Ministry of Finance of the Russian Federation. They are considered the most reliable securities in Russia, as they are provided by the state. That is, if the state refuses to pay the face value or coupon, then default automatically occurs.

Each federal loan bond has its own unique state registration code. The face value of each is 1000 rubles. New releases are released periodically.

For the state, OFZs are an excellent solution to cover the budget deficit. Wherein this way lending by attracting money from the public is the cheapest. For citizens, this method is also beneficial in that the rate of return is higher than that of bank deposits, and the reliability is higher.

The rate on OFZ bonds directly depends on the refinancing rate of the Central Bank of the Russian Federation. If the key rate grows, then new issues also have a higher yield. Usually the OFZ rate is slightly lower than the refinancing rate.

If we compare the OFZ interest rate with bank deposits, then they have almost the same yield (± 2%). At the same time, at different intervals, the profitability of some is replaced by others.

OFZs are a direct reflection of the current situation in the country's economy and further expectations of investors. Federal loan bonds reflect the "risk-free curve" yield (the return that can be made without risking anything).

For example, if the value of a bond on the exchange rises, this reflects the expectation of investors to lower the refinancing rate of the Central Bank. If the price, on the contrary, falls, then this is a sign of an unfavorable situation in the economy, preparing for increased inflation, a depreciation of the national currency, or a recession.

2. Types of OFZ bonds

The Ministry of Finance of the Russian Federation issues the following types OFZ

1. OFZ-PD (fixed coupon rate). Constant rate for the life of the bond. Investors can accurately forecast their returns over long periods of time. One of the most popular types of OFZ.
2. OFZ-PK (variable coupon rate). Every six months, the rate for this type of bonds changes in accordance with the RUONIA rate (the average yield on bonds over the past six months). As a result, it is not possible to accurately calculate the amount of earnings for the future period, since this amount will directly depend on changes in RUONIA.
3. OFZ-IN (indexed face value). Each month, the face value of the bond is indexed in accordance with the price index in the Russian Federation.
4. OFZ-AN (debt amortization). The debt is repaid periodically.
5. OFZ-FD (nominal value can vary from 10 to 1000 rubles)
6. OFZ-N (federal loan bonds for the population). They only appeared in April 2017. You can buy them at Sberbank and VTB. True, they are more like a contribution than bonds, since if they are sold before the maturity date, the accumulated coupon income (ACI) is lost.

By maturity OFZ can be divided into:

• Short-term (up to a year)
• Medium-term (from one year to 5 years)
• Long-term (over 5 years)

For example, US bonds (treasuries), depending on the maturity, have different names:

• Short-term Treasury bills (Bills)
• Medium-term treasury bonds (Notes)
• Long-term treasury bonds (Bonds)
• Treasury Inflation Protected Bonds (TIPS)

3. How and where to buy OFZ bonds for an individual

OFZs are circulated on the MICEX stock exchange in the "bonds" section. In addition, large transactions can be made on the over-the-counter market directly between banks and investment funds. For an individual, such transactions are closed. You can trade only through the MICEX.

Both any resident of Russia and any foreign investors can buy OFZ.

Access to trading on MICEX for individuals possible only through brokerage companies. You can find more than a dozen brokers on the market. I recommend working with the best of them:

They have the best trading conditions. By the way, here you can also open an IIS account that is convenient for you, which allows you to receive tax deductions from the replenishment amount.

Read more about bond trading in the following articles:

4. Which OFZ is better to buy

Depending on your goals, various OFZ issues may be suitable. At the same time, in any case, the money can be withdrawn at any time having received all the interest, even in the option with a long-term vision. Let's consider several options.

4.1. The money will be needed within two years.

An investment term of up to 2 years in OFZ bonds is considered short-term. In this case, the simplest and in a safe way purchase OFZ with a maturity of 2-3 years. The coupon rate will be average. At the same time, there are practically no risks of price fluctuations.

Even if OFZs fall in price for some reason, you will still receive your ACI and face value on the redemption day.

4.2. Money will be needed in 2-4 years

This situation is more difficult to describe. The longer the time period is considered, the more difficult it is to predict. In this case, it is logical to make a small risk diversification. For example, create one of the following bond portfolios:

• 40% - OFZ-PD with a maturity of 4 years
• 20% - OFZ-PD with a maturity of 10 years

• 60% - OFZ-PD with a maturity of 4 years
• 40% - OFZ-PK with a maturity of 4 years

Such a portfolio of bonds in any case will be both in plus and minus. But in total, we will get something in between, and higher than investing in one of the types.

4.3. Money will be needed in 4 years or more

In this case, it is necessary to draw up a long-term OFZ investment portfolio. It should also include several types of assets.

• 25% - OFZ-PD with a maturity of 4-6 years
• 25% - OFZ-PD with a maturity of 10-15 years
• 30% - OFZ-PK with a maturity of 5 years
• 20% - OFZ-IN (on the market little choice of this type, so you need to take what you have)

5. Advantages and disadvantages of OFZ bonds

• Reliability. This is what OFZ investors love the most. There is no more reliable bond or stock on the Russian securities market than OFZ.
• Liquidity. Compared to the stock market, the bond market is not the most liquid. But OFZs look much more liquid in this segment than many other issuers. OFZ bonds you can always sell with a minimum spread.
• Large selection of repayment terms. There are many types of OFZs on the market with different rates and maturities. The investor always has plenty to choose from.
• No coupon income tax. Coupon profits are not taxed.

• Small coupons. Although the difference with other companies is not such a big difference.
• Default risks. This is unlikely, but in this case, you can lose all the funds. So it was in 1998.
• Falling bond prices. If the key rate of the Central Bank grows, then the bonds will fall in price. Of course, this is not scary if you wait for the maturity date, because. in any case they will be redeemed at face value.

OFZs, or federal loan bonds, fall under the category of government bonds. Accordingly, many features of government securities are also present in OFZs: reliability, average yield, general procedure for issuing and circulation. Let us consider in more detail what OFZs are, what types they are divided into, and what is remarkable about the market for these securities.

What are federal loan bonds (OFZ)

OFZ are registered ruble bonds issued by the Ministry of Finance of the Russian Federation. The nominal price of most OFZs is 1,000 rubles. The holder receives income from a coupon interest, usually paid every six months, and / or a discount. Par value is paid on the maturity date, but bonds with amortization or offer can be found on the market.

All OFZs fall into the category government bonds and are therefore considered the most reliable. The yield on them is small, but the coupon rate exceeds the rates on bank deposits. That is why they are more profitable, even taking into account the payment of mandatory commissions.

Anyone can purchase OFZs, starting with professional participants in the stock market (banks, brokers) and ending with individuals who want to receive passive income.

Features of federal bonds include:

1. Preferential taxation - no income tax is charged on coupons. If you open IIS for operations, you can use additional privileges.
2. A large number of types: short-term, long-term, medium-term. Different types coupon payments.
3. Coupon and/or discount yield.

In the stock market, coupon bonds of the federal loan are most often circulated. Their owner is entitled to periodic deductions in the amount of the established annual percentage. Less common are discount, with depreciation and with an indexed face value.

If we analyze the features of OFZ, we can conclude that they are more designed for individuals and novice investors. Combination low risk and average profitability is the best start for investment activity. Without knowledge of a narrow specialization, you can immediately receive a guaranteed income and gradually master the stock market.

What are the types of OFZs?

There are the following types of bonds:

• With a variable coupon (OFZ-PK), the value of which depends on the weighted average yield on government short-term bonds (GKO) for the previous auctions.
• With a constant income (OFZ-PD), paid once a year and fixed for a period to maturity.
• With fixed income (OFZ-FD) were an alternative to OFZ-PK and GKO suspended in 1999. Income was transferred to investors quarterly.
• With debt amortization (OFZ-AD), when the face value is paid in installments, during the period of ownership.
• With an indexed par value (OFZ-IN) - imply monthly indexation of the rate, linked to changes in the index consumer prices for products and services produced in the Russian Federation.
• For citizens - OFZ-N or "people's bonds". The face value of the security is 1,000 rubles, but the minimum package includes 30 lots. The maximum deal volume is 15,000 bonds.

Buying and selling

Bonds are traded on the MICEX, for their purchase you will need to sign an agreement with a broker or a bank acting as an agent. OFZ-N citizens can only buy in the offices of agent banks: VTB or branches of Sberbank-Premier.

How to choose

For OFZ trading, special terminals, the most famous of them is QUIK. After setting up the platform and displaying the list of traded government bonds, you can classify them according to the necessary indicators, such as:

• value of profitability;
• circulation interval;
• size, regularity of coupon payments;
• exchange turnover per day and so on.

If the user sets up classification by bond yield, the program will sort them in descending order. That is, the highest-yielding OFZs will be in the top rows of the table.

Before buying, you need to decide on the choice of the period for which the investor is ready to invest. You can start with short-term debt securities with maturity in 1-1.5 years, their yield does not differ from long-term ones - about 8%.

How to buy

To purchase OFZ, a citizen should:

1. Open a special account with a broker or a bank with which an agreement has been concluded.
2. Install on PC software for transactions.
3. Top up your brokerage account. You can do this online or pay in cash.
4. Choose the appropriate types of OFZ and buy.

National bonds deserve special attention. The last issue 53003 is placed until 09/14/2018, after which it will be impossible to buy them. They also differ in a higher commission for the transaction (purchase or sale to maturity).

Additional Information: .

How to sell

Securities are sold on the stock market, the procedure for their circulation does not differ from the purchase and sale of any bonds. As for OFZ-N for the population, they can only be sold to the same bank in which they were purchased. If an investor wants to get rid of OFZs ahead of schedule, then he will have to pay a commission fee equal to the commission when purchasing bonds (from 0.5 to 1.5%).

Of particular relevance is the issue of OFZ implementation for investors in recent times, when the possibility of the US introducing new restrictive measures against the national public debt is high. In April of this year, the states have already introduced for legal entities and citizens a ban on the purchase of Russian OFZs. Then American investors began to massively sell securities. But, despite the short-term reduction in prices, which led to restrictions, the yield of securities increased by 0.4-0.5%. Therefore, investors should not be afraid of new sanctions.

OFZ market

The table contains the types of OFZs that are on the securities market in circulation. For some of them, there is information for previous years in accordance with the period of placement.

OFZ type	Average profitability on transactions per year, %	Coupon value per year, %
		2018	2017	2016	2015
53003-N	8,75	6
25083-PD	8,15	7
29011-PC	10,78	8,02	11,18	12,08	11,12
52002-IN	3,02	2,5
26208-PD	6,55	7,5
24019-PC	9,41	7,74	10,35

OFZ-N in Sberbank

People's bonds can be purchased at the offices of Sberbank of Russia with the Sberbank Premier service area. The call parameters are standard:

• nominal price 1,000 rubles;
• the smallest number of bonds is 30 pieces;
• the largest number - 15,000 pieces;
• yield at maturity up to 7.25%;
• increase in the coupon rate from 6 to 8.6% over 3 years;
• coupon transfers 2 times a year;
• the possibility of receiving income from the difference between the purchase and nominal value;
• in case of early redemption of bonds within 1 year after the acquisition, the bank undertakes to compensate the investor for all expenses incurred without income;
• if a citizen wants to get rid of OFZ more than 1 year after the purchase, then the agent will return the money spent and accrue income;
• OZF-N can be transferred to heirs.

OFZ-N at VTB

To buy securities, you need to visit a bank branch to open a depo account and a brokerage account. There are 2 options for transactions:

• in the user's personal account;
• by sending the relevant Order to the authorized office of the bank.

Pros and cons of bonds

The advantages of government debt securities include:

• Their profitability, it exceeds that of bank deposits, but less than the potential profit from shares.
• State income guarantee. By purchasing bonds, the investor receives information about the amount of profit and the frequency of its receipt.
• Acceptable value of bonds.
• Large assortment of securities.

Among the negative characteristics are:

• If the issuer encounters difficulties, then investors will wait until the moment of payment of lost profits. In the case of OFZs, the occurrence of such a situation is possible only in the event of a default in the country.
• Change in quotes of debt securities. This factor is important if an investor plans to sell bonds early. If the owner waits for its full repayment, he will receive nominal compensation.

To summarize, OFZs are reliable bonds available to everyone. Any citizen can invest money, and there is no need to study in detail the features of the stock market, the intricacies of securities circulation and fluctuations in quotations. It is enough to master the basic information and choose a reliable broker - it will not be difficult. OFZ-N are most focused on the population - they are purchased directly from the bank, where you can get a full consultation of a specialist. That is, there are no such actions as searching for an intermediary, setting up a terminal.

An important advantage of OFZ is a large selection of bonds by different parameters. The supply completely covers the demand for any characteristic: coupon type, repayment period, type of yield. And the average financial benefit is compensated by the reliability of the issuer represented by the state.

Information exchange between the Central Bank of Russia and financial market participants registered in the territory of the Russian Federation. A new version of the personal account of the Central Bank and its capabilities. Advantages and disadvantages new version. Step-by-step algorithm for creating an account

What is OFZ (Federal Loan Bonds)? These are securities, which are also called people's. The issuer and guarantor of the reliability of the investment product is the Ministry of Finance of the Russian Federation. The essence of such an investment is that you lend money to the state for a certain period. The investor receives income throughout the entire period of issuance of securities. After their action ends, the full cost of the bond is returned to the depositor.

OFZ types

To calculate the yield, you must first find out what types of government bonds are divided into.

bank bonds

OFZ at par

Any OFZ has a certain nominal price - as a rule, it is 1000 rubles. Theoretically, if you have 1,000,00 rubles at your disposal, you can already lend to the Russian government. But bonds are traded not at par on the market, but as a percentage of par value.

Let's say one bond is traded at a price of 105 (%). This means that the real value of the security is not 1,000 rubles, but 105% of 1,000 rubles. = 1,050 rubles. The real cost can be either more than 1,000 rubles, or less than 1,000 rubles. If one OFZ with a face value of 1,000 costs 95 (%), this means that its real value is 950 rubles.

The following types of bonds are classified as OFZ at par:

1. OFZ-IN. The zero-coupon yield is based on the CPI (consumer price index) in Russia.
2. OFZ-AD. The first issue of a security with debt amortization in Russia was carried out in 2002.

The main difference between debt amortization obligations and ordinary ones is that the repayment date usually begins after a certain period of time. (For example, it can be issued in 2016, and repayment on it will begin only in 2020.) Quite often, such securities are issued for the FIU.

By payments

The accrual of funds will occur daily, but payments are made once every six months. Coupon income (CA) - what is it? This is the money that the company (in this case, the state) will pay you for lending money to it:

1. With a steady income. Payments are fixed for the entire validity period and do not change, i.е. the investor receives the same amount in a certain period of time. For example, if the bond was issued in 2009, coupon payments would be made every 182 days.
2. With a fixed coupon. Since 1999, the Ministry of Finance of the Russian Federation began to issue this type of bonds. In fact, the name has nothing to do with reality, since the coupon rate may change over time. However, the depositor will know about all changes in advance. For example, for a certain period of time, an investor receives payments of 8%, and then his income decreases to 7%.
3. With variable coupon income. To calculate the profit, inflation and the index for one-day ruble deposits are used. Profit / loss depends on the behavior of rates in the money market.

Payments are made on time

How to Calculate Bond Yields

OFZ-PD (with fixed income) cash payments are carried out 2 times a year (once in 182 days). They also have ACI (accumulated coupon income). This value is distributed over the days - for example, if every 182 days an investor receives 100 rubles, then his daily coupon income is 100/182 = 0.55 rubles.

If before buying the ACI is 30 rubles, this indicates that 30 rubles. already accumulated and 70 more should accumulate.

Let's consider the following example:

The cost of the bond will be 1,000 * 105% = 1050 rubles.

We add ACI and get the total value of the security = 1050 + 30 = 1,080 rubles. (not including the commission charged by the broker).

Every 182 days, the investor will receive 50 rubles, which will be transferred to the brokerage account and the investor's current account (depending on the terms of the agreement).

When purchasing OFZ with a constant coupon income, the investor calculates his income based on a special index (for example, RUONIA).

Investment calculation example

Benefits of investing in OFZ

Consider the benefits:

1. A small entry threshold (you can invest only about 1,000 rubles by buying one security)
2. It is possible to make an investment by independently choosing the maturity of the security.
3. High yield. AT last years banks reduce interest on deposits and the average yield on them in Russia is 5-6%. By investing in OFZs, an investor can expect to pay from 7 to 10.4% per annum.
4. The risk of losing savings is very low. The guarantor of OFZ reliability is the state, so it turns out that an investor can lose his investments only if a default occurs. Such a prospect is unlikely, but if it comes true, the investor's investment will be protected. The state is responsible for its obligations with its property. Only bonds issued by foreign issuers are more reliable than Russian OFZs. However, they lose to Russian securities in terms of yield.
5. Ease of purchase. In order to buy government bonds, you need to contact the brokerage department of VTB or Sberbank. Before making a purchase of securities, it is necessary to sign a brokerage service agreement with the bank.

Underwater rocks

When buying OFZ bonds, the investor must not only pay the full price for them, but also a commission to his broker. The amount of commission payable depends on the value of the purchased securities. If the OFZ amount is less than 50,000 rubles, the investor must pay a commission of 1.5% of the cost. If a citizen purchases securities in the amount of 50,000 rubles. up to 300,000 rubles, then the commission will be 1%. In the event that the value of securities exceeds 300,000.00 rubles. – 0.5%.

Due to the fact that the investor pays a commission to the broker, the final profitability decreases. With a simultaneous commission of 1.5%, OFZs will have a lower yield than a bank deposit.

When selling OFZs, the bank (broker) also removes a commission of 1%. This is another factor that reduces profits.

If the investor sells the bonds during the first year, he will not earn anything at all. The sale of OFZ-n takes place at face value, without paying any interest. But since the bank commission will be charged, this means that the investor will not only earn nothing, but also lose part of his investment. If a citizen owns bonds for more than 1 year, he will receive interest for previous periods in full.

Comparison with other financial instruments

The issue of OFZ is designed primarily for the masses who do not have deep knowledge in the field of investments and financial investments. Highly qualified financiers more often give their preference to securities that have a fairly high degree of reliability, but are more profitable.

Experienced investors usually form a financial portfolio consisting of various instruments. The presence of corporate bonds in the portfolio increases the potential yield by 1-2%.

You can buy bonds at a bank branch

When and where to buy

An individual can purchase OFZ, the issue of which was in March-September 2018, only through the 2 largest banks: Sberbank and VTB. After signing an agreement with a broker, a bank client can choose an investment strategy through a personal account remotely. For Sberbank clients, the Sberbank Investor application was developed and special program QICK, where an investor can make transactions with securities. The buying process is easy and hassle-free.

The owner of the state bonds can only be sold at the bank where he bought them. They cannot be transferred to third parties, but can be left by inheritance. It is impossible to buy OFZ from a private person; they cannot be used as collateral when obtaining a loan.

What is IIS

This is a specially designed Russian authorities a product to stimulate the purchase of shares, OFZs and other securities by Russian citizens. By opening an Individual Investment Account, the investor will receive not only a coupon income that is not subject to personal income tax, but also a relief in the payment of income tax (to receive benefits, you must be officially employed).

Recent developments in the banking sector have greatly undermined the credibility of even large and seemingly reliable banks. As the case with Vneshprombank showed, today even a personal good acquaintance with the top management of the bank, and the presence serious people and corporations among customers, makes no guarantees. Therefore, you need to look for a reliable replacement for a bank deposit. Federal loan bonds (OFZ), which will be discussed in this article, can serve as such a substitute.

Federal loan bonds are bonds issued by the Ministry of Finance of the Russian Federation. This type of bonds is considered the most reliable financial instrument on the Russian financial market, and the OFZ interest rate is often used as a risk-free one.

Government bonds are a tool available to almost any investor and have a number of advantages:

• high reliability — bonds are issued by the state and are considered the standard of risk-free assets among Russian financial instruments;
• low entry threshold - the cost of one security is about 1000 rubles;
• high liquidity - the daily turnover of trading can be hundreds of millions of rubles;
• a large selection of repayment terms: from less than a year to several decades;
• diversity by income type: with a fixed coupon, with a variable coupon, with depreciation of the face value, with the indexation of the face value, which allows you to choose the appropriate type of bonds depending on the strategy, investor's goals and the current economic situation;
• preferential tax treatment.

OFZ types

Federal loan bonds are divided into several types according to the type of coupon payment and face value.

According to the type of coupon payments, government bonds are divided into:

Thus, if interest rates on the money market rise, the OFZ-PK coupon yield rises, while rates fall, and the yield also falls.

At face value, government bonds are divided into two types:

Denomination indexation occurs daily. Data on the current and future face value are published on the website of the Ministry of Finance for a month ahead at least 2 working days before the beginning of the month. You can also find out the value of the current coupon there. Initially, these bonds were issued with a par value of 1000 rubles, now it is 1040.4 rubles. Coupon income and income from indexation are not taxed.

Thus, OFZ 52001-IN gives a net yield of 2.5% above inflation. This tool becomes especially profitable in the face of rising inflation and rising interest rates, when ordinary bonds fall in price.

Analysts at Gazprombank modeled the OFZ-IN issue as if it started trading in January 2004 and reproduced its dynamics. Calculations show that by May 2015 synthetic OFZ-IN would outperform stocks, bonds, gold and other assets. However, it should be noted that dividend income was not included in the stock return.

OFZ yield

Government bond yields are made up of two things: coupon yield and redemption/sale yield. Government bonds are currently trading at yields ranging from 8% to 12% when viewed on QUIK.

Yield on federal loan bonds

However, the yield indicated in the table is the yield of the last transaction and it may differ from the yield that is currently being offered. Therefore, I recommend looking at the profitability in the order book. In addition, for bonds with a variable coupon, the yield is calculated only on the date of payment of the last known coupon, and not to maturity. To calculate bond yields, I use my . Also, do not forget that you can make up to buy it for and additionally get an investment tax deduction in the amount of 13%.

In Quick, you can plot the yield of bonds. To do this, you need to find in the top panel of QUIK and click the button "Create bond yield chart". In the tool window, select T+Bonds and click OK. Then the program will build such a graph, where each point corresponds to a separate bond. The horizontal axis is the maturity, and the vertical axis is the yield.

OFZ yield chart

Taxation of Federal Loan Bonds

OFZs are taxed at 13%, which is levied on the difference between the purchase price and the sale/redemption price of the bond. Moreover, the purchase and sale price includes not only the price of the bond itself, but also the ACI paid or received, as well as transaction costs. Coupon income on government bonds is not taxed, therefore it is not included in the calculation of the financial result. Thus, the taxable base of government bonds is calculated as follows:

NOB = Bond sale/redemption price + ACI received - Bond purchase price - ACI paid - transaction costs

Bond yield curve

The OFZ zero-coupon yield curve, or G-curve, is a graph showing the zero-coupon yield of various government bond issues over time. The vertical scale reflects the yield of bonds, the horizontal scale shows the maturity. The curve can be used to analyze the current situation in the financial market and forecast interest rates and inflation. Under normal economic conditions, the graph looks like a smoothly rising curve - with an increase in the maturity, the yield also increases.

But there are other types as well. For example, in September 2014, the curve looked like when the highest yield was given by medium-term bond issues, and not long-term ones. This usually means that the market is expecting a tightening of the Central Bank's monetary policy, an increase in interest rates, this type may precede a crisis in the economy.

Within a couple of months in December 2014, expectations were justified: the Central Bank sharply raised the key interest rate by 6 points at once. After a sharp increase in the key rate, the curve took an inverted form, when short-term issues bring the highest yield. Such a bend occurs when there is a strong liquidity crisis in the market.

You can see the yield curve at:

• on the Central Bank website: http://www.cbr.ru/gcurve/Curve.asp
• on the Moscow Exchange website: http://moex.com/ru/marketdata/indices/state/yieldcurve/

Now the zero-coupon yield curve looks like this:

Now the highest yield is brought by short-term securities, which give about 9%. This suggests that the market expects the key rate to be cut, because the current OFZ yield less value the key rate is 11%, and with an increase in the maturity of securities, the yield of securities decreases.

How to choose OFZ?

A wide variety of government bonds can confuse a novice investor. But you can give a few tips that will help you choose the right type of OFZ.

If you expect interest rates to rise in the market, it is better to buy bonds with OFZ-PK variable coupon. Then as rates rise, so will your coupon income.

An increase in interest rates usually occurs in times of crisis, which often coincides with rising inflation. In this case good choice will buy OFZ-IN. Most of the income of these securities comes from the indexation of face value, and the coupon income is very small and not suitable for generating cash flow. If you expect inflation to decrease, it may be better to choose other issues.

If you are expecting lower interest rates, then it is better to buy bonds with a constant or fixed coupon, so you will lock in a high coupon yield for the future.

Amortized denomination bonds are a good fit for those who need intense current cash flow to be spent. It is not worth buying them for other purposes, since a large cash flow creates a large reinvestment risk compared to ordinary securities.

Some corporate bonds, at first glance, yield more than OFZs. But you need to remember that coupon income makes up a large part of the income of bonds, and in the case of corporate bonds, it is taxed. Therefore, most corporate bonds do not generate more income than OFZs, while they carry more risk. I gave the calculations in the article.

How to buy federal bonds?

In order to buy OFZ, you first need to open a brokerage account or IIS. How to do this, and how to choose a broker, I wrote. After opening an account, you need to install a trading terminal on your computer, most often it is QUIK, a broker will help you with this.

To buy, you need to use the trading terminal. To begin with, I recommend creating a current parameter table in QUIK, adding the T + Bonds class to it, and setting its appearance as follows:

This view will allow you to quickly evaluate the most important parameters:

• current denomination;
• maturity date and number of days before it;
• bid and ask prices, you can see that some issues are not actually traded, because their glass is half empty and there are no orders to sell;
• the number and volume of transactions - this is how you can assess the activity of trading and the liquidity of the security;
• coupon information - value, ACI, payment date and duration.

OFZs are traded in the T+ mode, that is, the settlement of the transaction and the delivery of securities occur on the next trading day after the transaction. To buy securities, open the trading glass and click on the desired purchase price. The red sector is the selling prices, the green sector is the buying prices. Bond prices are displayed as a percentage of the face value, for example, the price of 97.35% means that with a face value of 1,000 rubles, the price in rubles is 973.50.

OFZ purchase

In the order window, you can change the purchase price, set the desired number of lots (1 lot is equal to one security). On the right, you can see the volume of the transaction, taking into account the accumulated coupon income, which is paid upon purchase, and the commission for the transaction. The purchase price of a bond with ACI is 973.50+17.26=990.76. Click Yes to apply. The sale of a bond proceeds in a similar way.

After purchasing the OFZ, coupon income and face value will be credited to your bank or brokerage account. The Russian broker is a tax agent, so the calculation and withholding of tax will be carried out by him without your participation. If you are going to buy OFZ on IIS and spend coupon income, then make sure that your broker transfers coupons to a bank account, because you cannot withdraw money from IIS without closing it.

The sale of OFZ for individuals has begun

Sberbank and VTB24 have begun selling OFZs to households, or "people's" bonds. Experts explain how these securities are more profitable than deposits and how they differ from classic OFZs

Photo: Vasily Fedosenko / Reuters

On Wednesday, April 26, sales of federal loan bonds (OFZ) for individuals started at the offices of Sberbank and VTB24. "People's" bonds are issued for a period of three years, the volume of their first issue amounted to 15 billion rubles. Given that the face value of one paper is 1,000 rubles, investors now have access to 15 million new OFZs. According to the press service of Sberbank, total number by the end of the day there were about 1,000 clients who submitted applications for the purchase of bonds. The total volume of applications amounted to 912 million rubles. at par, the average order size is 0.9 million rubles. VTB24 accepted about 500 applications worth approximately RUB 700 million. The average size of the application amounted to 1.4 million rubles, follows from the commentary of the bank's press service.

The minimum amount of investments in "people's" bonds is 30 thousand rubles, the maximum is 15 million rubles. The OFZ coupon for the population will be paid every six months, and its size will increase with each payment in order to motivate investors to hold the purchased securities until maturity. The rate of the first coupon will be 7.5%, the second - 8%, the third - 8.5%, the fourth - 9%, the fifth - 10%, and the last - 10.5% per annum. Thus, the average yield of the "people's" bonds for three years will be 8.5% per annum.

However, the final yield will be lower due to the commission that the investor must pay to the bank when buying OFZ. Its size depends on the amount invested in securities: if the client buys "people's" bonds for less than 50 thousand rubles, then the commission will be 1.5% of the purchase amount. If the investments are larger - from 50 thousand to 300 thousand rubles, then the commission will decrease to 1%, and if more than 300 thousand rubles, then the bank will take 0.5%. Thus, when buying securities for 30 thousand rubles. and a commission of 1.5%, the real yield of the "people's" OFZ will be 0.13 p.p. lower than promised - 8.37% per annum, and when buying 50 thousand rubles. and a commission of 1%, it will be 8.42% per annum. It is most profitable to buy these securities for large amounts: with a commission of 0.5%, their yield will be at the level of 8.46% per annum. At the same time, an employee of VTB24 in the branch at Myasnitskaya, 35, told an RBC correspondent that when buying bonds, they would have to pay another 150 rubles. for the transaction (Sberbank did not report such payments).

However, the press service of VTB24 claims: "All commissions are set by the Ministry of Finance and range from 0.5 to 1.5%, depending on the amount for which clients draw up bonds."

From the materials of the Ministry of Finance on the issue, it follows that the investor who bought "people's" bonds on the first day of circulation, that is, today, will be the biggest winner. In practice, this is not possible if you do not have an open brokerage account. The opening procedure alone takes one day at Sberbank and three days at VTB24. And if the investor wants to purchase securities later, for example, in a month, the accumulated coupon income accrued over these 30 days will be added to the purchase amount. For example, if a client comes to a bank branch on May 26 with the intention of buying securities for 30 thousand rubles, he will have to pay 382 rubles for them in addition to the commission. accumulated coupon income. At the same time, as explained to RBC in Sberbank, if the buyer purchases bonds six months later, immediately after the payment of the first coupon, he will not have to pay the bank the accumulated coupon income, but he will not receive the last coupon of 10.5%.

Photo: Dmitry Serebryakov / TASS

It will not be possible to sell "people's" bonds as ordinary ones: there will be no secondary market for these securities. The only option is to sell OFZs to the agent bank where they were purchased. However, for an early sale, the bank will take the same commission as for the purchase - from 0.5 to 1.5%, depending on the amount. So, if the holder of papers for 30 thousand rubles. decides to get rid of them a year after the purchase, he will receive a yield of only 4.76% per annum. It is also worth noting that from time to time the Ministry of Finance will revise the cost of one "people's" bond, based on the quotes of OFZ circulating on the organized market. However, Sberbank and VTB24 assured RBC that the investor would be able to sell his "people's" bonds at the purchase price.

According to experts interviewed by RBC, when launching trading in "people's" bonds, the Ministry of Finance was not guided by the task of creating a very profitable instrument. Rather, he sought to accustom the Russians to the fact that bank deposits are not the only way storage of funds. “This is a transitional stage between deposits and the stock market,” emphasizes Sergei Korolev, an analyst at Alor Broker.

Instead of a deposit

Experts agree that "people's" bonds may be in demand among those who keep money in bank deposits. The chief debt market analyst at BC Region, Alexander Yermak, notes that the yield on three-year bonds, even taking into account commissions, exceeds deposit rates: in April, the average rate on three-year deposits in 15 largest banks was 5.89% per annum. At the same time, the profitability of ruble deposits will continue to decline in the coming months, Dmitry Postolenko, portfolio manager at Kapital Management Company, is convinced.

From the point of view of capital protection, OFZs for the population are quite comparable to both classic sovereign bonds and bank deposits insured by the DIA, says BCS Managing Director Oleg Chikhladze. “By and large, the guarantees of the DIA are also guarantees of the state,” he says. According to the financier, there is no reason to expect a state default, since the federal budget and the balance of payments are now in good condition. In addition, the volume of the debut issue is only 15 billion rubles, and this is not so much that there could be problems with redemption, he notes.

Differences from OFZ

But for private investors who are already working with financial markets, "people's" bonds are less interesting, financiers say. In general, these securities have no serious advantages over conventional OFZs, says Alexander Nikonov, head of debt markets at Svyaz-bank. “The differences are mostly technical,” he explains. “In order to buy ordinary OFZs, an investor needs to contact a broker, open an account there and buy paper on the stock exchange, and to buy “people's” OFZs, it is enough to contact agent banks.”

However, commissions when buying regular OFZs through a broker are an order of magnitude lower than when buying "people's" OFZs in banks. For the purchase and sale of bonds, brokers take 0.04-0.1% of the transaction amount, says Korolev from Alor Broker. In addition, investors pay a commission to the depository - about 100 rubles. per month, if at least one transaction was made during this period. Some brokers also set a threshold (50,000 rubles on average) and take a commission (about 200 rubles) if the amount of assets does not reach the set level, says Korolev.

The yield of OFZ with a fixed coupon is slightly lower than the yield of "people's" government bonds, taking into account commissions for the purchase: the issue of OFZ 26214 with maturity in April 2020 will bring the investor 7.96%. But bonds with a floating coupon already offer a higher yield: for example, on the issue of OFZ 29011 with maturity in January 2020, it is 9.59%.

Experts call the main drawback of the "people's" OFZs low liquidity compared to classic government bonds. “An investor can sell ordinary OFZs at any time and, in addition, profit from the growth in the market value of the paper,” reminds Postolenko from Capital Management. Considering that there are few people in the country who are ready to invest a large amount in bonds and forget about it for three years, this is a significant minus, the expert adds. After all, if the owner of the "people's" OFZ urgently needs a certain amount for some needs, he will not be able to withdraw it from the papers without loss.

Tips for investors

With all that said, “people's” government bonds are suitable for novice investors who want to invest in a low-risk instrument, says Vyacheslav Andryushkin, First Vice President of the Asia-Pacific Bank. Ermak from BC "Region" advises to invest more than 300 thousand rubles in government bonds in order to minimize losses due to bank commissions.

Korolev from Alor Broker recommends to wait and not to buy "people's" OFZ immediately, even though in this case the investor will have to pay the accumulated coupon income. The fact is that if the demand for "people's" bonds is not very high, bank customers will have the opportunity to purchase them cheaper than face value. In the secondary market, the price of securities would be determined during the auction, but in the case of "people's" OFZs, the price (as a percentage of the face value) will be set by the Ministry of Finance, depending on the demand for them, the expert says.