Copenhagen Stock Exchange: Focus: Corporate Bonds - A Good Alternative In Uncertain Times

Corporate bonds are a relatively new investment option in Europe, and as such an oft-forgotten asset class. However, in these times with great uncertainty about in which way the markets are headed, investors may profit from corporate bonds.

In Focus no. 49 Senior Analyst Clara Jørgensen, Danske Bank, describes the advantages of adding corporate bonds to the investment portfolio.

On the basis of data from the USA, the author shows that corporate bonds are a cross between government bonds and shares - both in terms of return and risk. Corporate bonds are expected to offer a higher long-term return than government bonds, but a lower return than shares. The author also illustrates that the average return of a portfolio containing corporate bonds will be higher than a portfolio without corporate bonds.

The overall conclusion made by the author is that a good investment policy is to invest in assets that are as widely diversified as possible to reduce the risk. And this is where corporate bonds are a good alternative, particularly in times of uncertain markets.

Read the article "Corporate bonds - a good alternative in uncertain times" in Focus no. 49 on the website of the Copenhagen Stock Exchange www.cse.dk.