Those who invest in them should take a closer look-the options usually differ in details.
Picture: Picture Alliance
Those who want high interest rates today can only choose the risk they take: poor credit, long-term or structured. Dual currency bonds are particularly tricky.
DAs we all know, bonds of better quality are currently difficult to generate (interest) income.even though Interest expense If it rises in the foreseeable future, the actual return (that is, after inflation) is unlikely to remain in the zero or lower range. However, the current central bank’s bond purchases have convinced the market that bonds will still find buyers. If interest rates should rise, they will no longer exist because bond purchases have stopped prematurely. This can be uncomfortable because, given higher interest rates, no one wants to hold a coupon bond of 0% to 0.75%-there is still a long way to go, but there is definitely a potential risk.
The fatal thing is that this Bond There is no interest rate buffer, which is exactly why bonds are considered safer than stocks, for example. In short, the risk of bonds is close to that of stocks. If you want high bond interest rates today, you have to take more risks. These may be credit risks due to the shift to high-yield bonds or so-called duration risks due to longer maturities. Or structured risk. There are currently a large number of reverse convertible bonds whose repayment amount depends on the stock price, which is well known.
