The new capability allows institutions to provide their end users, retail investors, the opportunity to delve into a rich pool of over 300 high-quality corporate and government bonds across major markets, including the US and the EU with minimal initial investments.
Asset fractionalisation, or dividing a high-value asset into smaller, tradable units, is rapidly gaining popularity among capital market players, as all industry leaders race to integrate fractional shares in their product offering. However, the bond market, which is one of the largest security markets globally, continues to be widely overlooked, limiting institutions ability to serve risk-averse investors effectively.
Historically, the bond market has been dominated by institutional investors due to high entry costs and complex trading practices. Many bonds have minimums imposed by the bond or the dealer and typical sizes are offered as increments of $10,000, with lot sizes trading north of $100,000. This poses significant barriers for retail investors who often find it challenging to gain access to this form of investment. The essence of fractional bonds lies in their potential to break these barriers and democratise the otherwise elite bonds market.
With the roll-out of fractional bonds functionality, Velexa is taking a significant step to make the bond market more accessible, offering a lower-cost entry point into this vast market. More investors will be able to diversify their portfolios, potentially reducing risk and enhancing possible returns. As a company on a mission to democratise wealth generation through investing, building the right tools to empower retail investors to achieve their financial goals is a focal point in the way we design our technology., comments Tamara Kostova, CEO of Velexa.
With the introduction of fractional bonds, Velexa is further enhancing its suite of API-based platform and solutions, enabling their customers to deliver personalised and robust investment experience for their end-users. The modular nature of the technology facilitates seamless integration of the new functionality into the institutions existing channels and apps via Velexas Investing API solution.
The launch of fractional bonds represents more than just an addition to Velexa’s suite of investing tools – it constitutes a pivotal step towards altering the landscape of personal investing. By bridging the gap between the world of high-cap investment and the individual investor, Velexa is paving the way for retail-focused institutions like banks, neobanks, brokers and exchanges to widen their customer base and meet the varying needs of next-generation investors.
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