Bond funds: is a hard lesson about to be learned?

Low interest rates in the UK, driven by successive rounds of quantitative easing, may have helped the government finance its borrowings, but they have been no good for savers. In their search for greater yield, they have turned to the fixed interest markets. With government stocks offering little more than cash deposits, corporate and high yield bond funds have successfully attracted significant amounts of new money. Yet, while these do offer a much higher yield than cash deposits, they also represent a much riskier investment proposition. Much has been written about the so-called ‘gr...