Investment masterclass: Are bonds back?

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This is an audio transcript of the Money Clinic podcast episode: 'Investment masterclass: Are bonds back?'

Article originally published by The Financial Times. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

Published by

29 Aug 2023

Brooke Masters
Let’s start with something super basic. What are bonds and why do they exist?

Edward Al-Hussainy
Bonds are really a fantastic financial instrument. In fact, one of the first financial innovations. Bonds are an option for you to participate in the income stream generated by an asset. In contrast to equities, which are essentially an ownership stake in an asset, bonds give you the certainty of that income stream, and therefore it’s quite different, but much more stable.

Brooke Masters
What are the different types of bonds?

Edward Al-Hussainy
So largely three core forms of debt out there. One is sovereign debt, which is issued by governments and therefore backed by their ability to raise taxes. Two is private debt issued by companies and therefore backed by the balance sheets and income statements of these companies, backed by their business models and their ability to generate cash. And three is debt backed by the