Are you looking for a relatively low level of risk yet with some investment return? If so, think about corporate bonds. They have become an increasingly important part of an investors’ portfolios in recent years simply because they still provide a reasonable return in a yield starved world.
Risk: Investors should consider risks before investing. See dedicated risk factors section on this website.
What are Corporate Bonds?
Big companies need to raise capital regularly to grow, and they do so regularly through the bond markets. They use capital to invest in innovation and expansion – it’s vital fuel for any business. In return, companies normally commit to reward investors by paying a coupon, or interest, on the bond, as well as to repay it at maturity after a set number of years.
So, by investing in corporate bonds you help companies to finance their growth.