By Exec Edge Editorial Staff
GoodFill USA, LLC will introduce the first smartphone app dedicated to corporate bond investments for US retail clients in the second quarter of this year. The firm has been approved as a broker dealer and will offer analytics and trade execution services to individual investors. Jeff Zavattero, the firm’s CEO, noted “interest rates have increased significantly over the past year and it’s been difficult for savers to make the most of new market opportunities. Our platform is about enlightenment and empowerment.”
GoodFill offers investment grade bonds with at least $1000 in principal for a minimum commission of $2. The extremely low transaction fee allows savers to diversify their portfolios by spreading investments across multiple issuers and maturities. There is no cost to open or maintain an account, and investors may easily buy or sell bonds based on real time market pricing.
According to SIFMA data, American households owned $1.6 trillion of corporate bonds in 2012 and that declined by 90% in the past 10 years. The total amount of fixed income funds meanwhile jumped 58% over the past 5 years with household ownership now exceeding $5 trillion. Unlike the bonds they contain, fixed income mutual funds and exchange traded funds rarely have fixed maturity dates meaning investors are exposed to continuous price volatility. Bonds purchased below par offer opportunities for long-term capital gains if held beyond one year and sold before maturity.
Managing their own portfolio enables investors to directly control capital gains based on their unique circumstances, which may include capital losses in other asset classes such as equities, rather than delegating those decisions to a third party with multiple constituents. “We believe American retail investors can be their own investment grade bond fund managers,” said Eiki Mera, GoodFill’s Head of Trading.