31 August 2022

Bonds guide

We’ve published a new investor guide to bonds, designed to help novice investors find out more about an asset class that only 6% of Kiwis currently invest in directly.

Bonds are loans from investors to governments and companies for a fixed length of time, or term. Although typically they don’t have the high returns of other financial investments, they are seen as essential to any portfolio.

They aren’t just limited to big institutional investors – everyday investors can use them to diversify their portfolios and spread risk.

Our new guide cuts through the jargon to help novice investors understand what bonds are, how they work, what kind of investment they are and all the different types.

  • Bonds pay regular interest, can be traded during their term, and pay back capital on maturity.
  • High-grade bonds are generally a predictable investment, so they’re ideal for anyone who is investing for a relatively short time or looking to balance their portfolio with lower-risk investments.
  • They are also much simpler to buy and sell than many people realise – you can buy them through a broker or invest in a fund consisting of bonds.

So before investing in bonds, check out our new bonds guide, Bond Voyage to understand how they work and how to choose, buy and own bonds.

Download Bond Voyage: Bonds Guide

Bond voyage complements previous FMA investor guides to shares: Share this! Investor guide to Shares and the Managed Funds Guide.