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Hunt for income put junk bonds in the sun

Ed Monk

Ed Monk - Fidelity Personal Investing

This week, why, when GDP is through the floor and an historic recession beckons, have the market’s riskiest company bonds just enjoyed their best month for nine years?

That’s the question we’ll answer today as well as why cuts to the income you can expect from shares and historic levels for gold are contributing to a particularly confusing picture for investors right now.

Important information: The value of investments and the income from them can go down as well as up, so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. Overseas investments will be affected by movements in currency exchange rates. There is a risk that the issuers of bonds may not be able to repay the money they have borrowed or make interest payments. When interest rates rise, bonds may fall in value. Rising interest rates may cause the value of your investment to fall. Due to the greater possibility of default an investment in a corporate bond is generally less secure than an investment in government bonds. Sub-investment grade bonds are considered riskier bonds. They have an increased risk of default which could affect both income and the capital value of the Fund investing in them. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.

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