A primer on bond investing

BONDS have surged in popularity over the past couple of years following the steep rise in interest rates. Now that newly issued bonds are paying much higher coupons than before, retail interest in bonds has never been higher.

We believe bonds will remain popular; the asset class provides not only portfolio benefits but also much higher income.

For those who are less familiar, bonds can be simply understood as loans from the investor who is the lender to an entity (the borrower). In return, the entity will typically pay the investor a fixed interest or coupon over a predetermined period.