With the current economic outlook in the UK looking uncertain, many of us are exploring different ways we can save money and make our income go further. Although investing in something like crypto may yield high returns, it can be risky. If you’re looking for a low-risk way to save, bonds might be the way to go.
Before you decide whether to go down the bonds route, we’ve compiled everything you need to know below.
What are bonds?
A bond is a type of loan in which the bondholder lends money to a company or government. In short, when you buy a bond, you’re giving the issuer (i.e. the company or government) a loan. This loan will be paid back on a specific date, and you will also receive interest payments along the way.
Although they don’t give you company ownership rights, bonds are less risky as you won’t see as much of a negative impact should the company not do as well as you’d have hoped.
Whilst bonds may seem tricky, in practice, they aren’t as long as you have a wealth manager to advise on your circumstances.
What are the top bonds to invest in?
If you’re sold on bonds, here are some of the best ones for you to choose from.
- Capital Group Global High Income Opportunities Fund
The fund aims to provide a high total return whilst minimising the volatility of returns. This bond has been made for investors who are looking for higher returns.
However, although this bond has the potential to yield high returns, it is a slightly higher risk and so any investor must be comfortable with a more volatile market.
Fund size: £76 million
- CG Asset Management Dollar Fund
This bond aims to achieve long-term capital growth. This bond will invest your money in US government and corporate index-linked bonds. This fund may also invest in traditional government and corporate debt.
With a potential recession on the horizon in the UK, this bond is excellent for those looking to protect their bond from the negative impacts of inflation. As a bond with a low level of risk, this is well-suited to those who want to diversify without taking on too much risk.
Fund size: £877 million
- CQS Global Sustainable Convertible Fund
This investment’s purpose is to achieve attractive risk-adjusted returns over the mid to long term by buying and holding securities across global markets.
One of the benefits of this bond is that it provides downside protection when equity markets are falling, making this a less risky investment.
Fund size: £166 million
During a time of uncertainty, many high-wealth individuals are looking to diversify risk and invest their money into secure investments that yield good returns. One excellent way of achieving that is through bonds.
Although it can be difficult to know where to start, by hiring a wealth manager with experience in the field, you can be sure you’re making wise decisions when it comes to your wealth.