In this final edition for the Bond basics series we will explain the capital structure – one of the key pieces of information about the risk of your bond – and see how it works in practice.
In this article we will explain the basics around a bond itself, what the market looks like and how they work.
Trade opportunities
We've updated our Sample Portfolios for the month.
The key point to remember here is that bonds are not aiming to outperform equities. We are aiming to bring something different to an investment portfolio.
When assessing a company from a bond perspective, despite some similarities, there are also some critical differences to the criteria we use for assessing a company for equity investments.
Bonds are always lower risk than shares in the same company but do carry some of the same risks. They also have unique risks that can be used to your advantage under various economic conditions.
It’s important for investors to periodically review their portfolios and make sure it is still fit for purpose and behaving as the investor intends. Coming up to the close of the financial year or soon after it has closed off is an ideal time to review your portfolio as there is a hard milestone for tax purposes and also for valuations.
Trade opportunities
We've updated our Sample Portfolios for the month.
Primary issues in the wider market typically offer a premium to secondary issues and are accessed by bidding into a bookbuild process.
The US bond market is the largest and most liquid market in the world.