Investing several tens of thousands of rubles in federal loan bonds (OFZ) simply does not make sense; a bank deposit here seems to be a much more convenient instrument. But if you have really large savings amounting to several annual incomes, then part of the funds can be invested in government securities, experts say.

New conditions for issuing "people's" OFZs

The Ministry of Finance may next year change the terms of issuing federal loan bonds (OFZ) for the population. As stated by the Minister of Finance Anton Siluanov, the department expects to increase demand for “people’s” OFZs among citizens with low incomes, since so far it is mainly wealthy Russians who are showing interest in these securities.

The average application volume since the beginning of the year was 1.2 million rubles, with a minimum application amount of 30 thousand rubles. At the same time, the share of people who invested less than 50 thousand rubles in bonds did not exceed 7%. Most of the OFZ were bought by residents of St. Petersburg and Moscow. In this regard, Siluanov suggested thinking about the availability of securities and reducing their minimum cost.

“People with low incomes simply do not have money for investments, they often do not even have enough for food, so they do not consider the question of whether to invest in state obligations or not. A repetition of the Soviet approach, when part of the salary was paid out in bonds on a voluntary-compulsory basis, is now impossible. The skew in demand for OFZs towards wealthy Russians looks absolutely logical. People with excess funds are looking for additional investment opportunities and diversification of their investment portfolios.

In addition, bonds are a more complex financial instrument than a bank deposit. To make a profit, you need appropriate education and knowledge of the laws of the financial market. Otherwise, we will see a repeat of the “people’s” IPO of 2007, when people massively invested in VTB shares, but they then fell sharply in price and are still not worth that much. OFZ should not initially be aimed at a wide audience,” says senior researcher at RANEPA, banking specialist Mikhail Khromov.

Bonds or deposits

As a financial analyst previously noted Dmitry Adamidov, it was possible remotely on the Internet even before the introduction of people's bonds, through which the authorities tried to attract a different audience to the market. And although the current average yield on OFZ-n is 8.5% per annum, we should not forget about the pitfalls of such an investment of funds. For example, when calculating OFZs, it is important to take into account bank commissions for buying and selling bonds.

“Investing several tens of thousands of rubles in federal loan bonds (OFZ) simply does not make sense. If you buy a bond, it is not clear how to sell it, and you should not forget about taxes when selling securities. It is much more difficult to calculate profitability here, so a bank deposit in this case seems to be a much more convenient tool. In addition, deposits are insured, and the rates there are not much different.

If you have some large savings that amount to several annual incomes, and you are really interested in diversifying your investments, then some can be invested in government securities for a long period. This will allow you, at least over time, to receive a tax deduction,” sums up Mikhail Khromov.

Based on the activity in the comments, typical questions from novice IIS owners have accumulated. The most important of these questions sounds like “Which OFZ to buy on IIS?”

The answer to the question “which is best to buy” will depend on what the investor’s goal is. There is a well-known saying: “A mountain has one peak, but there are many paths to it.” This means that the goal of “earning more profit” does not mean anything without the necessary clarification:

• For how long?
• With what risks?
• In what markets?

These are just the most basic points that can be considered. Thus, the very existence of such a question “Which OFZ to choose for purchase?” - it's just pointless. Like that old joke:

- Petka, equipment?

- Nine!

- What is “nine”?

- What about “devices”?

This anecdote illustrates the impracticality (and, to some extent, absurdity) of such a question. As for making a profit, it can be obtained in different ways, and not everything is measured by its size.

In fact, in a casino, the potential profitability can be much higher than from OFZ coupons (as of January 2017, about +6.7% per annum), but the probability of this potential profit is orders of magnitude lower than with OFZ (with OFZ, the probability of profit is close to 100%), and the risks are such that hardly anyone will agree that a casino is the best way to achieve the goal of “maximum profit”.

Thus, the answer to the question “which is best to buy OFZ for IIS” will differ depending on what our investment strategy is. It’s one thing if we use it, and another thing if our plan is to buy and forget for three years.

A little later in the site materials we will look at all possible strategies for using OFZ on IIS, but right now we can take several scenarios as an example:

• "Buy and forget"
• "Bond crocodile"
• "Coupon Harvester"

Bought and forgotten

Most IIS investors prefer this simplest strategy - select suitable OFZs once and do nothing else for the remaining three years.

In this case, the task is:

• Do as few actions as possible
• Find OFZ with a maturity date close to the expiration date of the 3-year term of the IIS agreement
• Get maximum yield by purchasing longer bonds

In a normal and stable economy, you can always get much greater profits by placing funds for a longer period.

You can verify this by studying bank deposit rates:

There is a logic to this: the longer the investment period, the higher the risk of unpredictability, which means that the investor needs a higher reward for taking on increasing risks.

The described pattern is also true for OFZ:

Thus, OFZs maturing in three years should be more profitable than those OFZs that will mature in the next 3-6 months. The willingness to play “long” is the main “trump card” of such an investor, and it is precisely this that is advisable to play using the “buy and hold” strategy.

However, if you take a closer look, you can see that, for example, at the moment, purchasing OFZs with a maturity date of 3-4 years does not provide a significant advantage:

For example, purchasing OFZ 26208 with maturity in a year has the same yield as OFZ 26205 with maturity in 3 years.

In those cases where OFZs do provide an advantage in long-term profitability, we see that this advantage is negligible, about +0.1-0.2% per annum!

Disadvantages of the buy and hold strategy

Why do most IRA investors prefer this strategy? Because of its apparent lightness. At first it seems that you only need to work hard once, and then only get results.

But the reality is that following this strategy in its pure form does not work:

• From time to time you need to make a decision about what to do with the income (coupons). Such a decision will have to be made at least twice a year, and if the portfolio contains more than two OFZ issues, then 4 times a year or more. If the tax deduction is reinvested, then the number of transactions again increases
• Ideally, an investor needs to forecast in order to receive maximum income from using OFZ

The main risk is that rates in the economy will change, and an investment that seemed very profitable today may look completely different in a year or two:

You can imagine how uncomfortable it will be for us if, for example, we consider a case where we entered into a bank deposit agreement for 3 years at 10% per annum, and after just a year the deposit rates jumped to +15% per annum (this situation occurred in 2014 ), and we still have to (let’s assume that according to the terms of the agreement we cannot terminate the deposit agreement before the end of the term) keep our money at a modest +10%.

OFZ with a constant or variable coupon?

As you can see, OFZs with a constant coupon may turn out to be unprofitable if rates in the economy are raised (in simple terms, this can also be called an increase in inflation).

The use of OFZ with a variable coupon eliminates this problem, because the yield of such OFZ will change following the bank refinancing rate, but you can end up in the opposite situation, in a situation with a decrease in rates in the economy, while OFZ with a constant coupon makes it possible to fix the profitability for the entire period up to repayment.

This means that even here the investor will have a difficult choice of which OFZ to buy: with a constant or variable coupon, and the answer to this question will depend on what forecast he has for changes in rates in the economy for the next three years.

If rates are expected to increase over the next 3 years, OFZs with a variable coupon will be more profitable; if rates are expected to decrease, OFZs with a constant coupon will be more profitable

How can we understand what rates will be in the future?

Here is how the key rate of the Central Bank of the Russian Federation has changed over the past 15 years:

It can be seen that since 2003, rates have generally decreased, reaching a minimum of 5.5% per annum in 2013. Current rate (01/31/2018) = 7.75% per annum, there is very little left until there is an absolute historical minimum.

Options for changing the bank rate

There are, as always, three options: bad, good and average.

A sharp increase in rates for

Looking at the graph, you can see that there were periods on the graph where the trend moved in the opposite direction: 2007-2008 (Global Financial Crisis) and 2013-2014 (Crimean Crisis).

Are such events possible in the future? Yes, they are possible. Anyone who believes in the possibility of such events in the future should buy OFZs with a variable coupon - in case of surprises, the yield will change following inflation (high rates).

Smooth rate growth

A smooth increase in the rate is possible against the backdrop of further deterioration with the West - a ban on American and European investors to purchase Russian OFZs could put the state in a situation where it will have to attract money at increasingly higher rates.

Most likely, the effect of such an event will not be immediate, but will be extended over several years, because selling 30% of the total volume of existing OFZs (the volume in the hands of non-residents) will not only be difficult, but impossible.

In this case, the ban will probably only apply to the purchase of new OFZ issues. Rates will slowly but steadily creep up, and with them the OFZ yield. Therefore, buying OFZs with a variable coupon again looks preferable: if the rate (and inflation) increases, then the yield of such OFZs will also increase.

Further rate reduction

The option of further reducing the rate suggests itself based on the entire trend of the past 15 years. A rising oil price (for example, up to $100 per barrel) may make it possible to fill the budget from completely different sources than loans through OFZs.

In this case, rates could naturally go down, which means buying OFZs with a constant coupon would be very profitable: it’s nice to receive a risk-free 7% on your investment, when banks will barely give 4-4.5%.

Which option is more likely?

If we accept the axiom of the cyclical nature of the economy (a recession is always followed by a rise, and a rise is always followed by stagnation or recession), then it is likely that the wave of rate cuts that has been going on since 2014 is coming to an end.

In 2013, when there was no Crimean crisis and the concept of “sanctions” did not exist for citizens of the Russian Federation, the rate reached 5.5% per annum.

Can this happen now, when sanctions are not only not being eased, but also new ones are being introduced?

It probably makes sense to increase the share of OFZs with a variable coupon in the portfolio; in this case, protection against “black swans” and rising tensions will be maximum.

Which OFZ to buy for the next 3 years

As you can see, the “bread” of an investor adhering to a “buy and hold” strategy is not entirely easy. You can spend no less time and effort on the work than when using other strategies for using OFZ on your IIS. And by and large, this is not the easiest option for using bonds, as it seems at first glance.

Be that as it may, for a person who is going to stick to this strategy, answer to the question “Which OFZ is best to buy on IIS” will sound like this:

One issue (one name of OFZ) with a variable coupon or (if OFZ with a constant coupon) with the maximum yield to maturity on a date close to the end of the 3-year term of the IIS agreement

In this case, investing will be as close as possible to the principle of simplicity, and is available to any novice IIS owner.

Here is a list of OFZs that may be suitable for such investment in 2018-2019:

Note: the yield of OFZ 29011 is indicated for reference, corresponds to current rates and will change in the future. Despite the fact that this OFZ has a duration of only two years, after two years another similar OFZ with a variable coupon will appear on the horizon - OFZ 29012.

At this point, the consideration of the “Buy and Hold” strategy of the question “Which OFZ to buy on IIS” can be completed and we can move on to alternative strategies for using OFZ.

Bond crocodile

Only OFZs are suitable for the strategy with repayment in the next 3-9 months. Only in this case will it be possible to effectively use this mechanism.

This is a very simple and only condition. Of course, it goes without saying that it is best to choose the most profitable OFZs, i.e. OFZ with the highest possible yield to maturity in these remaining few months.

As of January 2018, there is only one OFZ that more or less approaches these parameters - OFZ 26208 with maturity in a year.

Coupon harvester

Obviously, for more efficient operation of the Coupon Harvester, it is most advisable to use the following criteria for selecting OFZ:

• OFZ with the maximum possible coupon size (at the same time, the OFZ yield itself may be low - this does not play any role)
• OFZ with the closest coupon payment date
• If you plan to use margin lending, then you need OFZs included in the broker’s margin list

Here is the schedule for OFZ coupon payments in 2018:

Name	maturity date	Coupon size, rub	Months until maturity	Next coupon date
OFZ 46023	2026.07.23	36.62	103.4	2018.02.01
OFZ 29006	2025.01.29	52.9	85.7	2018.02.07
OFZ 46021	2018.08.08	12.47	8.1	2018.02.07
OFZ 46020	2036.02.06	34.41	217.6	2018.02.14
OFZ 26207	2027.02.03	40.64	109.8	2018.02.14
OFZ 52001	2023.08.16	14.03	68.2	2018.02.21
OFZ 26215	2023.08.16	34.9	68.2	2018.02.21
OFZ 26217	2021.08.18	37.4	44.4	2018.02.21
OFZ 46014	2018.08.29	17.45	8.8	2018.02.28
OFZ 46018	2021.11.24	16.21	47.6	2018.02.28
OFZ 26208	2019.02.27	37.4	14.8	2018.02.28
OFZ 29007	2027.03.03	51.96	110.7	2018.03.14
OFZ 26204	2018.03.15	37.4	3.3	2018.03.15
OFZ 46019	2019.03.20	8	15.4	2018.03.21
OFZ 26219	2026.09.16	38.64	105.2	2018.03.28
OFZ 26218	2031.09.17	42.38	165.1	2018.04.04
OFZ 26221	2033.03.23	38.39	183.2	2018.04.11
OFZ 24019	2019.10.16	45.52	22.3	2018.04.18
OFZ 29008	2029.10.03	51.01	141.7	2018.04.18
OFZ 26205	2021.04.14	37.9	40.2	2018.04.18
OFZ 26222	2024.10.16	35.4	82.2	2018.04.25
OFZ 26216	2019.05.15	33.41	17.3	2018.05.16
OFZ 29009	2032.05.05	50.11	172.7	2018.05.23
OFZ 29012	2022.11.16	44.63	59.3	2018.05.23
OFZ 26214	2020.05.27	31.91	29.7	2018.05.30
OFZ 25083	2021.12.15	48.33	48.3	2018.06.20
OFZ 46011	2025.08.20	99.73	92.3	2018.08.29
OFZ 46012	2029.09.05	83.63	140.8	2018.09.19
OFZ 48001	2018.10.31	7.58	10.9	2018.10.31

Thus, the question “Which OFZ to buy on IIS” in the light of the strategy under consideration implies completely different answers than were true for the “Buy and Hold” strategy.

conclusions

In fact, there is no big difference which strategy to use. The main profit of the IIS owner comes from tax deductions:

Hence, The easiest way choosing OFZ for IIS implies a refusal to participate in active actions and, and at the moment (the recommendation is valid until 2022) is to purchase OFZ with variable coupon issues 29011 (maturity in 2 years) and 29012 (maturity in approximately 5 years).

If you want to hear other opinions on this issue, .

Federal loan bonds (OFZ) is one of the types of securities in Russia, which is issued by the Ministry of Finance. In fact, they have a standard format; their only peculiarity is that the reliability of the papers is ensured by the state itself.

What is the essence of federal loan bonds?

In essence, by buying OFZ, you are lending money to the state for a certain period. With an OFZ, you will receive coupon income (usually every six months) throughout the life of the bond. Upon expiration, you will be returned the original cost of the bond itself.

Types of OFZ

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

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

• OFZ-PD - with constant coupon income

The coupon value of these securities is constant throughout the entire circulation period of the bond. The coupon payment frequency is once every six months.

• OFZ-FD - with a fixed coupon

The amount of coupon payments may change over time, but is known in advance. For example, the first few years the coupon income may be set at 7% of the face value, and the next few years at 6%.

• OFZ-PK - with variable coupon income

The coupons of such bonds are tied to some floating interest rate, for example RUONIA (the rate on overnight interbank loans of the 28 largest banks) or the official one. The coupon yield is calculated as the RUONIA rate + some interest rate, for example 0.74%. Therefore, for such bonds only the current coupon is known, and each subsequent coupon is calculated based on the average RUONIA value for the last 6 months.

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

Based on their face value, government bonds are divided into two types:

• OFZ-AD - with nominal depreciation

For securities of this type, the nominal value is not repaid at one time, but gradually in parts. The depreciation schedule is known in advance. The denomination can be repaid at regular intervals, but there may be breaks. The nominal value can be repaid either in equal or unequal parts.

• OFZ-IN - with nominal indexation

Now on the market you can buy two issues of securities of this type: OFZ 52001-IN with a maturity date of August 16, 2023 and OFZ 51001 with a maturity date of March 31, 2021. These are bonds with a par value indexed to consumer inflation. The coupon yield of OFZ 52001-IN is 2.5% of the par value, OFZ 51001 is 2.25%, the coupon payment period is once every six months.

The denomination is indexed daily. Data on current and future denominations are published on the Ministry of Finance website a month in advance at least 2 working days before the start of the month. There you can also find out the value of the current coupon. Initially, these bonds were issued with a face value of 1000 rubles, now it is equal to 1040.4 rubles. Coupon income and income from indexation are not taxed.

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

How is the OFZ rate calculated?

OFZ market rates are either constant or variable. Constant or fixed rates are established for each coupon period of each individual issue. The variable rate is formed taking into account official data characterizing the level of inflation. The OFZ rate depends largely on the key rate.

What is the yield on federal bonds?

The yield on OFZ is formed from two parts:

• The income that the owner of a Russian federal loan bond receives from the coupon;
• Profit from purchasing a coupon at a price lower than its nominal value.

If a bond is purchased at a price higher than the nominal price, without taking into account the coupon income, this leads to a loss, because its repayment is carried out strictly at the nominal value.

In the process of OFZ circulation, coupon profit is accumulated. As the next coupon becomes due, the bond's value increases. An investor who resells a bond before the coupon payment must take into account the accumulated payments on the security. The cost of purchasing bonds is constantly within the par range. The exact price is determined by market conditions, which can be either higher or lower than the cost of the bond.

When working with OFZs, you need to take into account the specifics of taxation of this type of income. Each type of income OFZ is subject to taxes. For example, for the income received from the difference between the purchase and sale of a bond, you will have to pay about 35% . Net coupon income is taxed at 15% of the amount received.

It is extremely important to take these points into account in order for manipulations in the bond market to bring good profits. Any activity in this segment is regulated by law.

What is the advantage of OFZ over other securities?

Investments in bonds are one of the most reliable types. When compared with bank deposits, the level of reliability of OFZs is higher. The reliability of bank deposits directly depends on the bank's rating. There is a direct relationship here: the higher the reliability of the bank, the higher the reliability of the safety of deposits. But there is also a significant disadvantage. A high reliability rating comes at the cost of lower interest rates. If we analyze the offers from the largest Russian banks (Sberbank, VTB and others), we see that their bank deposit rates are the lowest. The difference can be 50-80% than the average for this sector.

The state is the guarantor of the OFZ payment. And accordingly, the state reliability rating. bonds is equal to the credit rating of the state itself. It is responsible for its obligations to state holders. debt.

If the state ceases to be responsible for its obligations, then this happens. But the probability of a default in the country is much lower than the default of any private company.

Higher in reliability are only bonds of foreign issuers. But they usually have lower returns.

Where are they traded and who can buy OFZs?

OFZs are traded on the Moscow Exchange and can be purchased through any broker. Buyers and holders of OFZ can be both Russian and foreign legal entities and individuals. The cost of one bond is 1000 rubles, the yield is in rubles.

The procedure for purchasing OFZs is no more complicated than opening a bank deposit. All you need is to choose a broker, enter into an agreement with him and purchase OFZ. Also, many major banks provide similar services. You can also get advice from them, depending on your goals, which bonds you can buy at the moment.

I’ll say right away that this post does not in any way address the possible risks of the product.
Our many times deceived people have a million fears, and financial literacy is no longer much different from the dashing 90s, Soviet (and even 2007, everyone remembers)
I will only say one thing, do not think that in the event of a default on these securities, the banks will give back your deposits.
You also shouldn’t think about behaving like foreign currency mortgage holders during the next devaluation of the ruble.
My opinion is that the “discount,” if there is one, will be through inflation.

This is a post about how to consume this bond.
I’ll make a reservation that I myself haven’t fully understood the details of the implementation, so I’m waiting for corrections in the comments. The record is also supplemented and updated. I would like to post it quickly while it’s still relevant.

So what is this paper?

This is a government paper for which the buyer will receive coupons (interest), and will receive its body at the end of the term or upon early repayment. The placement period is three years, but you can withdraw earlier.
The simplest equivalent for a person familiar with deposits is a non-replenishable deposit with interest paid every six months with preferential termination. I hope there is no need to explain what this is.

How and when to buy?

You can buy from agents. For now, and most likely it will remain so, there are two of them. Sberbank and VTB24, I won’t tell you the details, you can look at the links below


In essence, a brokerage agreement is concluded; there is a separate column in the tariffs for OFZ-n. These tariffs have been agreed upon with the Ministry of Finance and are the same. The idea is that when purchasing and repaying securities early, you pay a commission to the agent, the size of which depends on the volume of the purchase.
After a quick look at the tariffs, there seems to be no service charge found. But I'm not sure about that. Brokers are good at hiding commissions.

You say: “What’s the deal, what’s the commission? I lend money, but I still have to pay a commission?”

Banks are commercial organizations, the money with which you buy these securities will not go to them, but to the Ministry of Finance, so they should receive something for their services.

Available for purchase on weekdays. Sales start day 04/26/2017.

It turned out to be crazy (see the links at the end of the article), VTB24 has been carrying out the transaction for almost a week, I have not yet understood whether this concerns only VTB or whether the Ministry of Finance is executing it, but this is really beyond the bounds. The heroine received better conditions, but for several days her money was just hanging out in a brokerage account. I can't understand how this can happen.

Profitability

To prevent the commission from making the purchase of these securities useless, the Ministry of Finance took a non-market route; it made the yield on OFZ-n higher than those OFZs that are traded on the market.
By the way, the market yield at the time of placement of the first issue was slightly more than 8%. What kind of profitability does the Ministry of Finance give? The profitability is higher, even taking into account commissions, but, as I mentioned earlier, OFZ-n is an analogue of a three-year deposit with a preferential early termination rate. We can calculate the rate that will be if we hold the papers until the end.
Concepts such as accumulated coupon income (ACI) and bank commissions for redemption, the rules of the Ministry of Finance and the changing denomination of the paper make the rate difficult to calculate and unique for every day.

There is also no clear answer to the question of what the rate will be if you hold the paper until the end for all three years, since not all the data is known. As of April 27, there is data for the first 3 days, so we will calculate the profitability when buying on the day sales start and describe the algorithm for calculating the cost.

Firstly, in order for the validity of our “deposit” to be 3 years, the paper must be purchased before the end of the week, that is, 04/26-28/04, since its maturity date does not float, but is known (04/29/2020).

What will we have to pay for the paper?

1. NKD (this is like accrued but not paid interest on a deposit, calculated every day, and also increases)
2. Cost (despite the fact that the denomination is known and is 1000 rubles, the cost will be determined for each week and will depend on the rates on the market). If the yield on market OFZs becomes 7%, then the paper will be sold at 3-4% higher than its face value.
3. Agent commission. They are known:
(minimum) 30,000 - 50,000 rubles: 1.5%,
50 000 - 300 000: 1%
300,000 - 15,000,000 (maximum) : 0.5%
Commission is charged on both purchase and redemption. When repaid only if it is early.
Accordingly, the maximum rate will be if you buy securities for at least 300,000 rubles and hold them until maturity (so as not to pay a second commission).
4. Another possible expense (but upon repayment) is personal income tax. There is no tax on the coupon, as on classic OFZs, but if you bought the paper at quotes below par (<100%), то на разницу должны заплатить налог. Кстати, следуя логике брокерских счетов, комиссия должна уменьшать налоговую базу, но подробностей пока не знаю. Ниже есть пример расчета с покупкой сабжа ниже номинала, но так как я не уверен, как его считать, пока не исправляю.

We calculate profitability.
Income as a percentage D = 100%*K / (P*N/100% + NKD + C)(K - coupons received, P - cost in percentage, N - face value, C - commission)

1. NKD. On the day of issue it is equal to 0 rubles. The next day we will calculate using the formula below.
2. We know the cost for the first days. This is 100% of the face value, that is, 1,000 rubles. This means that for 300,000 we can buy 300 securities. The Ministry of Finance will publish the cost of paper every week. I think the next one will be more expensive.
3. Agent commission - 0.5% (we consider the best case)

In order to calculate K, we sum up all the coupons from the table from the Ministry of Finance website

Code

38.84 + 39.89 + 42.38 + 44.88 + 49.86 + 52.36 = 268.21 is our percentage (K).
P = 100% (1), N = 1000 rubles, NKD = 0 rubles

Income as a percentage 100% * 268.21 / (100 * 1000/100 + 0 + 5) = 26.6876%
Annual interest (as if interest were paid at maturity) = D / T * 365 (T - days to maturity). We also sum up the duration of the coupons from the table (or simply subtract the date of purchase from the maturity date of the securities, we get 1099.
26,6876% / 1099 * 365 = 8,86%
This percentage does not take into account the reinvestment of coupons (for example, you can put them on a deposit or buy more OFZ-n), so the final maximum rate will be about 9%

If you buy paper not on the first day, then the income tax will be added to it, it will become non-zero, it is also published on the website of the Ministry of Finance, but we can calculate it.
The algorithm is as follows. We determine the coupon period from the table above. For example, May 30, 2017 falls into the first coupon period (04/26/17 - 10/31/17).
The daily NKD in this period is 38.84(size)/189(duration) ~ 21 kopecks. To receive the Tax Code for our date
(D - DK)*K/TK and round to the nearest kopeck.
38.84/189*(30.05 - 26.04) = 6.99.
In order to calculate the profitability when buying on May 30, you need to use this coupon, but the cost of the paper at that time is currently unknown to us.

What will we get if we repay early?

As in long-term deposits with preferential termination, the early termination rate increases depending on the period of time the funds are on the deposit.
In order to encourage us to make medium-term investments (and the department does not consider a period of up to a year to be average), the Ministry of Finance has provided for severe punishment for early repayment before the end of this year.
We will get our invested funds back without any income, but we will not get our commission back. And there will be two of them (entry and exit), the profitability will be -1% - -3% (depending on the amount) for the placement period, which, with rates in rubles at the level of 8-9%, is just a guard. Paper in no way not intended to be owned for less than a year
Plus another funny thing: now (the second week of circulation) the cost of the bond is below par, if it were higher, then we would be returned 1,000 rubles per security.

After a year has passed, conditions will be better, but not chocolate either.
Firstly, the initial cost is returned only if it is not more than the face value, as in the first case.
Secondly, commissions are here to stay. There will also be two of them.
But unlike the first case, here we will receive the entire NKD before the maturity date. And you can even calculate the real rate depending on the term. But first it should already become clear that it is better to keep these papers until the end. More precisely, consider their early repayment only if the money is really needed or the rates have become such that it is easier to cancel and get, say, -1% and put it at 20%, than to skip the whole pandemonium (like 2008-9, 14- 15).

Examples of calculations

To begin with, as indicated in the comments.

1. Buy immediately before the first coupon, hold it until the end

Of course, it’s ridiculous to assume this, but let’s say the securities will cost around their face value.
Costs, I remind you P*N/100% + NKD + C
We take the cost (P*N/100%) equal to the face value.
On October 31, the NKD will be equal to the full first coupon 38.84 - this is the duration of the first coupon period
The broker's commission is not taken from the NKD, so for one security with a purchase amount of more than 300 securities there will be 5 rubles per security.
The costs will be 1000 + 38.84 + 5.
As of tomorrow (11/1/2017), we should receive 38.84 rubles as a coupon payment, which we can again use to purchase bonds.
But the truth is, the amount of purchasing bonds should be decent (if the price per piece is 1000, then from 773 pieces), well, in the end we can count at least 15 million, so we’ll even take a commission of 0.5% again to get the maximum profitability.
Let’s take 10 million for good measure, then the coupon will be more than 300K.
Costs 10000*(1000 + 38.84 + 5) = 10438400 + commission for reinvesting the coupon (388000 * 0.5% = 1940) - multiple balance of the coupon (400) = 10439940
And we have 10388 papers. All further coupons (39.89 + 42.38 + 44.88 + 49.86 + 52.36) * 10388 will be 2382695.56
We calculate profitability. 2382695.56 / 10439940 = 22.823% for a period of 911 days or 9.14%! simple profitability.
But these are all fairy tales about a white bull; the denomination will be selected so that the profitability corresponds to the market one.
And you can only buy these securities for the first six months, so after paying the first coupon, it will probably no longer be possible. But this coupon can be applied to a regular deposit.

2. We are buying today (05/3/2017), we urgently needed money for the New Year

There’s nothing to even count here, we’ll pay the ACD + price*face value + commission, we’ll get back everything we paid without a commission and they’ll also take a commission for repayment, that is, we’ll get a negative percentage of two commissions from the face value.
However, if the price were higher than 100% of the face value, the losses would be greater.
Let’s say the price for a security upon purchase is 101%, the cash flow is 1.44, we buy more than 300K so that the commission is minimal.
Costs N*(1010 + 1.44 + 5.05), the coupon will be received in November (38.84), will be returned ( 1000 (no more than face value) + 1.44 - 38.84 (they won’t leave us a coupon, no) - 5.05)
996.39 / 1016.49 = 0.9802%, that is, 2% of the initial investment will be lost, of which 1% is due to commissions.

3. We are buying today (05/3/2017), at the end of next year (2018) we urgently needed money (12/29/2018). Soot

Price 99.8421% NKD 1.85, naturally we take more than 300K.

Coupons that we will have time to receive

Code

Total NKD = 44.88/182*59 = 14.55

We get back 998.42 (nominal value) + 14.55 (NKD) + 121.11 (amount of coupons) - 4.99 (commission for early redemption, the same as for entry) = 1129.09
Profit: 1129.09 - 1105.26 = 123.83
We lasted 605 days

123,83 / 1005,26 = 12,32%
12,32% / 605 * 365 = 7,43%

In principle, it’s not so bad for early “termination of the deposit”

As a result I will say, working tool, is suitable for those who believe that over the next three years the ruble exchange rate will be stable and deposit rates will continue to decline. At the same time, you get the reliability of Sberbank (not absolute, of course), with rates higher
You must understand that the time of entry into a security greatly depends on its output; in the second week of sales, the price fell (there are two versions of this) and it turned out that it was more profitable to buy them in the second week than in the first. We'll watch further.

Also, the paper is suitable for owners of savings in rubles greater than the DIA, whose plans do not want to distribute it among different banks with comparable returns. There are a million reasons to keep so much money in rubles (well, or a million four hundred thousand

Government bonds or federal loan bonds, like many other bonds, can be purchased on the Moscow Exchange. OFZs are issued by the Ministry of Finance of the Russian Federation and belong to the category of coupon securities, payments on which are made by coupons - however, within OFZs there are several different types of bonds, the features of which will be discussed below.

What are federal loan bonds (OFZ) ?

Any type of OFZ is public debt , i.e. the most reliable possible loan within the country - the international rating of an individual company is never higher than the rating of the country where this company operates. I wrote in great detail about bonds in general.

OFZs pursue the goal of preserving capital, while shares can bring higher income over the long term. Nevertheless, there are long periods in the market (both Russian and foreign) when bonds exceed stock returns. For America, the last bad decade for stocks was 2000-2010, which included two deep crises at the beginning and end of the period - and for Russia, the bad period was from the mid-2000s to the mid-2010s.

Consequently, federal loan bonds are quite capable of taking on the role of a relatively safe haven - and the variety of types of OFZs allows for very fine tuning depending on the desires and expectations of a competent investor. As of 01/01/2016, the volume of the country’s internal debt, according to the Ministry of Finance, is 7307.61 billion rubles - since the beginning of 2000 it has grown approximately 12.5 times.

OFZ or bank deposit?

However, is it even worth resorting to such an instrument as OFZ, when there is a bank deposit familiar to almost everyone, which also includes many settings and does not require either opening a brokerage account or time to study the subject and trading terminal? After all, a deposit, like bonds, provides for a debt obligation of the person to whom we lend our money.

To answer this question, you need to evaluate the profitability of the instruments, which is what we will do. First, let's go to the Moscow Exchange website ( http://moex.com/ru/marketdata , putting “Bonds” and “All OFZ” in the top fields) and sort the issued federal loan bonds by yield:

As you can see, the top three bonds are currently able to provide an income of more than 11% per annum, although you will have to wait quite a long time before the maturity date. The bond price is indicated as a percentage of the face value - 100% corresponds to the standard bond price of 1,000 rubles, and for example, 95% is equal to 950 rubles (the bond is traded at a discount). If we turn to the banking sector using the banki.ru website, and for reliability we limit ourselves to banks from the TOP-50, we will see the following:

Those. only two banks offer an income of at least 10%, and only in one case is there a single benefit - preferential termination of the contract. Reliability is clear - government debt is more reliable than the debt of almost any individual bank.

OFZs are available from 1,000 rubles, deposits from 10,000 to 50,000 rubles; however, you need to keep in mind that with brokerage services there is often an additional commission for the depository, so it is also recommended to buy bonds in amounts of at least 30,000 rubles. Consequently, the state has advantages here. no bonds. Finally, deposits can be opened for a short-term period (no more than three years), and federal loan bonds are issued with noticeably longer maturities. Of course, if necessary, they can be sold - liquidity for OFZs is usually quite good - but in this case you will have to pay the 13% tax discussed above.

As a market instrument, the price of a bond (especially a long-term one, as it is more volatile) is quite capable of rising significantly above its face value, which gives a chance of a good exit from the instrument - however, this may not happen. Total: OFZs can be more profitable than even the most profitable deposits , however, the real - taking into account inflation - profitability is influenced by the economic situation in the country.

Another important point is that OFZ can be purchased with, receiving a 13% tax deduction annually for up to 400,000 rubles. The deposit does not have this option. Consequently, over the three years that the money should be in the IIS, with a total contribution of 1,200,000 rubles and below, the average additional income will be about 8% per annum, which gives almost 20% per annum (at a federal loan bond rate of 11%) for three years .

However, for a qualitative comparison of OFZs with deposits, just knowing the bond’s yield is not enough, since this income can change and be paid differently. Therefore, you need to understand what exactly to expect from a particular bond - more on that below.

Types of federal loan bonds

For a more detailed understanding of the principle of operation of government bonds, it is advisable to present some classification. For example, according to the validity period of the state bonds can be divided into long-term, medium-term and short-term - currently there are OFZs on the market with circulation until 2036 (OFZ-46020-AD). However, a more interesting classification is based on the principle of payment of OFZ coupon income, according to which the following types can be distinguished:

Bonds with variable coupon (OFZ-PK). They were issued on June 14, 1996 in accordance with the General Conditions for the Issue and Circulation of Federal Loan Bonds. Income is paid once every six months (only the value of the coupon closest to payment is known), and the coupon rate is tied to some variable value - for example, inflation or the RUONIA rate, which can be understood as a weighted rate of overnight ruble loans from 35 banks and can be viewed on the website http: //www.ruonia.ru/;

• Bonds with constant income (OFZ-PD). They appeared in 1998 and provide for the fixation of coupon payments for the entire circulation period. Today they provide for the payment of a constant amount every six months, i.e. every 182 days during the circulation period;

In 1999, the issue of bonds with a fixed coupon (OFZ-FK or OFZ-FD) began. In essence, it was a innovation that was first issued to holders of short-term bonds, since the effect of the latter was simply frozen during the 1998 crisis. Despite the name, the coupon rate on such bonds can change, but the change is known in advance - for example, some years the payments are set at 9%, and then they will become 7%. Currently, such bonds are being replaced by debt amortization bonds;

Today, bonds with debt amortization (OFZ-AD), for which the amount of the principal debt is repaid periodically and is known in advance, have become noticeably widespread. The first release took place in 2002. The difference between such bonds and previous ones is that redemption on them usually does not begin immediately - for example, for OFZ-46018-AD, issued in 2005, the redemption start date is November 2019. In addition, the face value of the bond is not returned at the end of the maturity date in its entirety, as usual, but in parts and is determined by the amortization schedule - within the period established there, the investor is returned both part of the face value and the coupon income for the current coupon period. Such securities are intended for pension funds; their circulation period can reach up to 30 years;

• Last year, the issue of bonds with an indexed par value (OFZ-IN) began. According to them, the cost of a security is indexed monthly to the consumer price index in Russia; so far only two bonds of this type have been issued
  

You can find each type of bond (as well as the coupon payment schedule, which requires free registration) on the website rusbonds.ru by clicking there in the “Bond Search” menu. The result will be something like the following window:

In the market sector, you need to set “State” and vary the type of coupon, and there are many fine settings. So, if you do not select the type of coupon, but only select the presence of depreciation, then only federal loan bonds of the OFZ-AD type will be reflected in the search results. In the same window, you can determine the type of bond by entering its code from the Moscow Exchange website in the top search bar.

OFZ structure in different years

The graph shows that the dynamics of various types of OFZs have changed quite a lot over the years, although the total volume of issues, except for the period 1999-2002, has been constantly growing. Today, the volume of OFZ has increased by about 11% compared to last year and, according to the Central Bank, as of September 1, 2016, amounted to 5.32 trillion. rubles In addition, it will be interesting to compare the ratio of OFZ and corporate bonds:

The diagram clearly shows that corporate bonds in terms of issue volume caught up with OFZ in 2007 and since then have gradually increased their gap. There is also a noticeable increase in the volume of Bank of Russia bonds (OBR). At the same time, in 2012, about 60% of OFZ owners were Russian banks, noticeably less were pension funds, and only 3% were non-residents. However, according to the Central Bank as of today (September 1, 2016), this share is much higher and equal to 26%.

OFZ with debt amortization

It will be useful to talk separately about bonds with debt amortization; From what was written above it follows that a bond with debt amortization has common features with the principles of a loan. Repayment of debt on such a bond occurs simultaneously with interest on it - therefore, by the end of the period, the amount of nominal debt of OFZ-AD is reduced. This means that the interest on the amortized bond also decreases, since it is accrued on the remaining par value.

What does it mean? In the simplest calculation of a bond with debt amortization and a validity period of 3 years, its actual yield at the indicated 10% will be only about 6.7%. Let's take the following initial data:

• OFZ-AD bond with a validity period of 3 years;

• bond coupon 10%;

• denomination – 900 rubles.

The calculation is as follows: after the first year, the owner will receive income from the coupon equal to 10% of 900 rubles, i.e. 90 rubles, as well as the prescribed part of the denomination, for example 1/3 part (300 rubles)

In the second year, with a decrease in the face value by 300 rubles, the income from the coupon will be 60 rubles. + the second part of the nominal value of 300 rubles will be paid. As a result, the income will be 360 ​​rubles.

In the third year, using the same calculation principle, income will be 330 rubles.

Profitability for three years = (90 rub. + 60 rub. + 30 rub.)/900 rub. = 20%

Return for one year = 20% / 3 = 6.67%

Thus, the return over three years will be 6.7%.

Consequently, as a tool for generating passive income for a private investor, OFZ-AD is far from the best solution. This is explained by the fact that inflation, both before the start of payments and during the repayment period, can increase significantly - which means that the purchasing power of the nominal value with a profit will also decrease.

A natural question arises about the profitability of purchasing such securities. For the state, the benefit of such bonds is that it allows you to postpone the payment of debt for a long period. For the investor, there will be a benefit only if he expects inflation to decrease compared to today - in this case, there is a possibility of not only maintaining the value of the face value, but also making a profit relative to the real value of money. In essence, this is what current and future Russian pensioners can hope for.

The principle of operation of OFZ with indexation

Indexed federal loan bonds are a very young financial instrument that is just beginning to develop in our country. It can be said to be somewhat opposed to amortization bonds. Although it has been known in the world for quite a long time, today on the Russian market bonds with an indexed par value are represented by only two issues:

• OFZ 52001-IN – redemption is scheduled for August 16, 2023, and the coupon yield to par is 2.5%;

• OFZ 51001 -IN - redemption is scheduled for March 31, 2021 with a coupon yield of 2.25% of par.

Securities are indexed for changes in the consumer market or consumer inflation (and indexation is daily). This can be easily seen on the website of the issuer - the Ministry of Finance, where information on current and projected coupon denominations is published daily ( http://minfin.ru/ru/document/?id_4=64938 ). Payments on them are made once every six months; the resulting coupon profit is not subject to taxation.

Analytical studies have shown that in the period from January 2004 to May 2015, inflation-indexed bonds plus a coupon would have turned out to be the most profitable investment instrument in rubles, ahead of the MICEX index (excluding dividends), gold, Eurobonds or the currency basket. At the same time, this type of bond would have shown the greatest stability of quotes (the least volatility), practically not sagging during the 2008 crisis.

Of course, this behavior would change in other periods - for example, stocks are able to generate returns on average of 5-7% above inflation, and in the period 1999-2007 they gave much more. Nevertheless, taking into account Russian realities and the status of a developing country, OFZ-IN are, in my opinion, one of the most promising types of bonds, the market share of which is likely to gradually increase in the coming years. The benefits of this financial instrument are obvious in the context of growing inflation processes, making it possible to receive net income above inflation, without looking at the rate of other types of OFZ or bank deposits.

OFZ zero-coupon yield curve

The zero-coupon yield curve shows the yield of an array of OFZs depending on their validity period, which is plotted on a horizontal scale. Under normal conditions, long-term bonds of any issuer have a higher risk than short-term ones - which should be compensated by the increased yield of long-term bonds:

But the market is not ideal, so sometimes the zero-coupon yield curve has a different form from the one shown:

The formation of such a curve indicates crisis phenomena and signals a possible increase in interest rates, although it does not necessarily threaten immediate consequences. Thus, 2003, with a similar curve shape, turned out to be quite successful for Russian assets. However, the curve had a similar shape in September 2014, which quickly led to the collapse of the Russian currency.

Consequently, the zero-coupon yield curve should not be considered a reliable indicator of the crisis in Russia, although in America the difference in income between short-term and long-term bonds has made it possible to predict a crisis for more than half a century. The current zero-coupon yield curve can be seen at the link https://www.moex.com/ru/marketdata/indices/state/g-curve .

If the current key rate exceeds the maximum yield of short-term bonds, and the zero-coupon yield curve itself shows normal growth, then this indicates that there are expectations in the market for a further reduction in the key rate, as a result of which it will catch up with the bond yield.

OFZ: which one to choose?

Currently, the variety of OFZs allows the investor to choose the appropriate option for himself, depending on whether he expects an increase or decrease in future inflation (an increase or decrease in the interest rate). There is no shortage of analysis - while official statements are always inclined to promise us an optimistic future, if possible without paying attention to the shortcomings of the system. On the other hand, there is no shortage of rather gloomy forecasts - everyone chooses from their own ideas what to lean towards.

If you decide that inflation and interest rates will rise over the investment horizon you have chosen, then a reasonable choice would be either bonds with a variable coupon OFZ-PK, or bonds with an indexed par value of OFZ-IN, discussed a little higher. The latter can also be understood as a security in which reinvestment at the inflation rate is built in. On the other hand, if inflation is expected to decline, long-term bonds with a fixed coupon OFZ-FK are suitable. Although bonds with amortization are also suitable for this purpose, you need to pay attention to the fact that the start date of repayment is not very far from the moment of purchase, which will reduce the risks of an unfavorable situation in the future.

Purchasing OFZ through brokers

How to buy federal loan bonds for a private investor? The acquisition of this type of securities has a number of features - for example, like a bank deposit, they cannot be issued only with a passport.

The algorithm of actions is as follows:

• It is necessary to conclude a brokerage agreement with a large, reliable broker;

• Deposit funds into his account to purchase securities;

• Purchase the selected type of bonds on the provided platform

After the described actions have been completed and access to the Moscow Exchange has been obtained, you can configure the parameters table in the terminal by including the data you are interested in. Important may be information about the par value of the bond, its yield, time to maturity (the higher it is, the greater the risk), bid and offer prices, as well as information about coupons: size and date of payment, cash flow, frequency of payments. Then add the T+Bonds class. In this case, the terminal usually indicates the abbreviated name of the bond, for example OFZ 29007 - more detailed information about the coupon can be obtained by inserting “OFZ-29007” into the search site rusbonds.ru. The purchase algorithm itself is quite simple:

Delivery of the purchased bond in accordance with the selected mode will be carried out the next day - the price, as mentioned above, is presented as a percentage of the par value. Those. at a price of 108.9, the bond will cost 1089 rubles, taking into account the accumulated coupon income, even more: 1089 + 34.55 = 1123.55 rubles. An additional transaction fee will be charged (for example, 0.12%). By the way, unlike dividend shares, NKD payments do not affect OFZ quotes. You can choose a lower price in the order book, which will increase both income and the time of transaction. The yield indicated in the terminal is the yield to maturity - i.e. the rate of return that an investor will receive if he holds a security to maturity.

Another important point arises if OFZs are purchased using IIS. Since the latter provides for a capital tenure of at least three years, coupon income (if desired, to be spent rather than reinvested in other instruments) can be withdrawn directly to a bank account rather than a brokerage account.

Analogues of OFZ in the USA

Exactly 100 years ago, during the First World War, essentially the first practical experience of mass issuance of OFZs undertaken by the American government took place. At that time, the bonds issued were called the “Liberty Loan”; between 1917 and 1919, the number of users of this instrument, which promised good returns, grew from 350 thousand to 11 million people.

Therefore, due to both the status of the United States and the centuries-old experience of trading its government bonds, they are currently considered the most reliable in the world, despite the enormous size of America’s external debt and the fact that one of the issues of freedom bonds in 1934 was still marked peculiar . The fact is that the terms of the bond implied their exchange for gold at a fixed price, but which strengthened against the dollar in 1933 by 40% - the refusal of this obligation allowed the US government to make payments only formally, in a devalued currency.

In the early 80s, due to strong inflation in the 70s and an increase in the government key rate. US bonds showed a yield of more than 10% per annum - those who bought long-term issues with a constant coupon at that time in the 80s found themselves with excellent profits, as both inflation and the key rate in the US began to decline sharply. So in certain periods even the state. bonds are able to show returns comparable to other high-yield instruments.