Bonds

Bonds are a form of loan.

They are issued by governments or companies with the aim of raising capital to cover their expenses or investment plans. The bond issuer is the equivalent to a borrower, while the bond holder is the equivalent to a lender. However, a bond is different to a loan, as it depends on market supply and demand fluctuations, and not on bank intermediation. 

Bonds are issued for a specific time no less than 1 year and have a specific issue value. This value, also known as face value, is equal to the amount the issuer is borrowing. This is also the amount the investor receives at bond maturity. If the investor chooses to sell their bond before maturity, they receive its current market value.

Depending on the bond type and terms of issue, interest (coupon) payments are made on a regular basis. This is why bonds are also known as fixed-income securities.

There are different categories of bonds covering different investment needs: 

• Straight or structured – depending on their structure.
  
• Short-term, medium-term or long-term – depending on their term.
  
• Government or corporate – depending on their issuer.
  
• Bonds with regular coupon payment or zero-coupon bonds – depending on coupon payment and coupon payment frequency.
  
• Convertible bonds – depending on their financial function, i.e. on whether they can be converted into shares.

For all investment profiles

Bonds are suitable for all investment profiles, from conservative investors to investors willing to take on more risk.

You choose the bond that suits your investment profile.

Low-risk investment option

With bonds you benefit from:

• Fixed income through regular coupon payments during the term of the bond.
  
• Lower volatility compared to other investment products.
  
• Diversified portfolio to mitigate risk and achieve consistent returns.
  
• Guaranteed repayment of your initial investment at bond maturity for straight bonds; structured bonds are index-linked and offer no capital protection.