Here's How You Can Invest in Ukraine's Critical Future: Buy War Bonds from the UK!
Posted at 03:26 EDT, 22 March 2022, updated at the same time.
I have a strong desire to support Ukraine's current war effort and purchase war bonds safely, which I have learned about recently.
Are there any British platforms that offer these bonds, and are they a good investment choice?
To finance its military during the Russian invasion, the Ukrainian government has recently issued war bonds.
Used by governments to fund military spending, war bonds have been issued by the US during both world wars, with slogans such as "If You Can't Enlist, Invest. Buy a Liberty Bond".
The bond enables investors to lend money to the war effort in exchange for a return, upon the assumption that Ukraine emerges victorious. The bonds have a par value of 1,000 hryvni ($25) and a one-year maturity.
The offering has been popular among Ukrainians, with the government recently raising 5.4 billion hryvni ($185 million) through an auction of local currency and dollar domestic bonds.
The one-year dollar notes carry a price yielding 3.7%, while the local currency bonds yield 11%.
Interest from retail investors has been high, with many taking to social media to inquire about purchasing the bonds. However, they have thus far been limited primarily to institutional investors.
Stocks are straightforward for retail investors to purchase, with just the click of a button on DIY platforms, but bond investing is more challenging because banks usually sell them directly to professional investors and often require a minimum investment.
The Ukrainian government may consider expanding the bonds offering to not just local currency but also dollars and euros in the future, which would make it easier for retail investors to invest.
We consulted a handful of platforms to see if they had any plans to enable retail investors to invest in war bonds.
Interactive Investor stated it had not seen the bonds available for UK investors but would look into it.
Hargreaves Landsdown stated it could not offer the bonds due to their structure.
"These types of investments usually come with high minimum denominations and are only available to institutional investors.
"There are also a number of other considerations, including the fact that the bonds will be issued in Ukrainian hryvnia, and there may be issues with settlement and liquidity.
"The Ukraine crisis is rapidly changing, and we are carefully monitoring the situation."
AJ Bell stated that its dealers had explored trading war bonds on its Youinvest platform, but it could not support trades or hold the bonds on its platform since they are traded in hryvnia.
Although the Ukrainian government may offer euro or sterling bonds at some point, for now, you may be better off donating directly to humanitarian causes.
If these war bonds pique your interest, please be cautious when dealing with an unknown company or after a simple search engine inquiry. Scammers will exploit any opportunity, no matter how dire the situation.
It may be wiser to donate to reliable charities, although this will not provide any returns, it will help to support those impacted by this tragic war.
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