Credit looking worth the risk

Professional Adviser
clock

In the current environment of low inflation and lower government bond yields, investors seeking income have been turning to corporate bonds

The healthy economic climate enjoyed over the past decade brought lower inflation and lower government bond yields. The simple solution adopted by investors wanting to maintain the same level of income is to buy corporate bonds. Recent news headlines focusing on Enron, Marconi and Railtrack have highlighted the dangers of concentrating on income and ignoring the capital risks associated with corporate bonds. However, if the market reminded us that losing one's shirt is a real possibility, few investors would have been advised to invest 100% of their bond portfolio with one issuer. Ove...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Fixed Income

The cost of income: Why it's cheap again

The cost of income: Why it's cheap again

Second in a two-part series of articles

Colin Finlayson
clock 17 June 2026 • 4 min read
Fixed income, football and Scotland at the World Cup

Fixed income, football and Scotland at the World Cup

'28 years is a long time to wait for a World Cup; it's an eternity in bond markets'

Colin Finlayson
clock 11 June 2026 • 5 min read
James Flintoft: Long gilts and the price of credibility

James Flintoft: Long gilts and the price of credibility

UK gilt yields have moved sharply in the last month

Professional Adviser
clock 10 June 2026 • 3 min read