I want to support the war effort in Ukraine – can I buy war bonds through any major investment platform?
I am keen to support the current war effort for the Ukrainians and safely purchase war bonds, which I have heard about it.
Are any platforms in Britain offering the bonds and are they a good investment?
The Ukrainian government has issued war bonds to finance its military amid the Russian invasion
Angharad Carrick of This Is Money said: War bonds are used by governments to finance military spending: they have been used by the US during the two world wars, with slogans like: ‘If You Can’t Enlist, Invest. Buy A Liberty Bond’.
The Ukrainian government recently started to issue its own bonds to support its efforts against Russian troops.
The bond allows investors to loan money to the war effort in exchange for a return, assuming Ukraine is on the winning side. They have a nominal value of 1,000 hryvni ($25) and a maturity of one year.
The offering has proved popular in Ukraine – the Government recently raised 5.4billion hryvni ($185million) a from an auction of both dollar and hryvnia domestic bonds.
The dollar one-year notes are priced to yield 3.7 per cent while the local currency bonds pay out 11 per cent.
Interest from retail investors has been high. Many have flocked to social media to ask where they can buy the bonds but they have been largely limited to institutional investors thus far.
While retail investors can buy stocks at the click of the button on DIY platforms, bonds are more difficult because they are typically sold directly by banks to professional investors. They usually require a minimum investment.
The Ukrainian government may consider expanding the offerings not just in local currency but in dollars and euros meaning it is more likely retail investors would be able to invest.
We spoke to a handful of platforms to see if they had any plans to allow retail investors to buy war bonds.
Interactive Investor said it had spoken to its experts who had not seen the bonds be made available to UK investors but will look into it.
Hargreaves Lansdown said it would not be able to offer the bonds due to their structure.
‘These types of investments typically come with high minimum denominations and are only available to institutional investors.
‘There are also a number of other factors to consider, including that the bonds are to be issued in Ukrainian hryvnia and that there are likely to be issues with settlement and liquidity.
‘The Ukraine crisis is rapidly evolving and we are keeping the situation under careful review.’
AJ Bell said its dealers had looked into trading war bonds on its Youinvest platform but because they are traded in hryvnia it would not be able to support trades or hold the war bonds on its platform.
The Ukrainian government may well offer euro or sterling bonds but for now you may be better placed to donate directly to humanitarian causes.
If you are tempted by these war bonds, please be careful while parting with your cash with an unknown company or after a simple search engine request. Scammers will strike no matter what the circumstances are.
It might be wiser to simply donate via a number of reputable charities – although this won’t offer any kind of return, it will help support those who have been hit by the tragic war.