Given the current low level of interest rates, what kinds of alternatives have investors been looking to?
One such example is c orporate bonds, which are issued by companies in order to raise capital for their businesses. Similar to gilts (government bonds) they are quoted in nominal amounts of £100, have a (usually) fixed rate of interest which they pay and have a set redemption date when the investor should receive the return of their capital As a general rule of thumb, corporate bonds are categorised as having investment grade status (having a higher rating as awarded by commercial credit rating agencies) or high yield (popularly junk bond) status, where the higher rate of return is in exchange for the possibility of default by the issuer. The more recent decrease in the levels of corporate bonds, through fear of credit defaults, has highlighted another level of risk aversion by investors. There is now an increasing band of investors who are as concerned about the return of their capital as the return on their capital. As such, there has been a flight to quality, as evidenced by the ult
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- Given the current low level of interest rates, what kinds of alternatives have investors been looking to?
