Corporate Bond Funds

Corporate Bond Funds

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Corporate Bond Funds

With interest rates as low as they are income seeking investors may want to consider the merits of corporate bond funds. Corporate bonds offer the potential for higher income than from cash on deposit although you need to be comfortable with the associated investment risk.

Investing in a corporate bond fund offers investors:

  • Regular Income – Many funds offer either monthly or quarterly income options. If you invest in an ISA, income can be distributed to you tax free or if you prefer some funds allow you to accumultate the income within the fund by buying more units to provide capital growth.
  • Diversification – a typical corporate bond fund will invest in 40 institutions or more reducing the risk to investors in the event of a default of a bond issuer.
  • Potential for capital growth – providing a lower risk than equity investment

Important Risk Information:

This website contains information only and does not constitute advice or a personal recommendation in any way whatsoever. The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.

Different types of investment carry different levels of risk and may not be suitable for all investors. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment and should read the product literature. If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.