Corporate Bonds & Gilts
Always thought of investing as too risky? Some investments are less risky than others and gilts (UK government bonds) or corporate bonds could be a good place to start. Bonds are effectively an IOU from a government or a company; the contract runs for a fixed length of time and pays a regular and predictable income.
As governments are generally considered to be more creditworthy than companies, gilts generally pay a lower rate of interest than corporate bonds.
The returns you receive from gilts and bonds take the form of regular interest payments. However, the value of the bond can go up and down and your capital could be at risk. Among other things, the value of bonds and gilts depend on the perceived ability of the company or government to repay the investment and on changes in interest rates.
The value of Corporate Bonds & Gilts can fall as well as rise and you may get back less than the amount you invested. Fixed income investments depend upon the ability of the issuer to repay its debts at the maturity date. If you are in any doubt about investing in bonds, you should consult your financial adviser.
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