Santander corporate bonds

leahciM

Whooper wrote: »

They do advertise these bonds on their leaflet as low risk, and the "lady" did say they only invest in top rated companies within the UK and showed me the flattering rising graph


thanks

Totally off subject, but why did you include quotation marks around "lady"? Was the woman at the bank a blatant transvestite?

Loughton_Monkey

Bonds can be good to stabilise a portfolio. I would never buy funds from a bank. I have first hand experience of how bank fund managers operate. 'Managing' an existing bond is a complete and utter chore for them. They have never seen an 'end user' customer in their lives, and couldn't give two hoots about performance. They spend their time on 'new and exciting' new products (usually structured).

Go to a more professional (and probably lower charging) fund manager.

When times get 'good', industry will generally not fail. But bond interest rates will tend to go down. The price of an existing high-yield bond will go up, but it's yield will come down. When times are bad, some companies will default.

But you will not see the rabid ups/downs you get with a more risky equity fund.

Annisele

Anything that's returning 12% at the moment can't possibly be low risk for a UK investor. If it was, investors would be screaming for it - and the high demand would push up the price, and therefore reduce the yield.

To add to all the other posts, advice from banks can be *terrible*. Apart from the fact that they only have a very limited product range, the level of ignorance you can get from bank staff can be scary.

(I once had a bank employee try to sell me a corporate bond fund on the basis that it was "just like a bank account but with a higher interest rate". She also insisted that I must have a balanced attitude to risk because I was under 30 and "young people are always balanced". I thought she might backtrack if I asked for the KFD and asked some questions that suggested I had some idea what I was talking about...but nope, I think she was genuinely clueless and honestly believed the junk she spouted at me).