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Seven questions on corporate bonds answered

David Brett Published on Thu, Mar 22, 2018 / 12:05 PM GMT+8

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SINGAPORE (Mar 22): Investors face a constant dilemma over which assets, such as shares, bonds and property, to invest in. The answer is often that a mix of assets can help meet your goals. Different investments can perform well at different times. For example, when shares languish, government or corporate bonds may fare better. This is considered to be sensible diversification. With that in mind, we explain one of the assets that may be used to diversify away from equities – corporate bonds.

What is a corporate bond?

A corporate bond is company debt. If a company needs to borrow money it can go to a bank and ask for a loan or it can issue a bond for investors to buy. The financial industry sometimes refers to these types of investments as ‘credit’.