[Investing] Why choose global investment grade corporate bonds instead of cash or short-term investment?
As major central banks continue to raise interest rates in 2022 and the first half of 2023, deposit interest rates in many mature markets have become more attractive. Hawkish moves by major mature market central banks also pushed bond yields higher. While short-term investments such as term deposits and short-term funds do have their benefits in a portfolio, global investment grade corporate bonds may be preferable for the following reasons: Long-term growth potential: Yields are currently at ten-year highs, and policy rates in mature markets have reached or are close to peaking, opening up good entry opportunities for investing in global investment-grade corporate bonds. If the global economy remains solid, global investment-grade corporate bonds may generate higher income than U.S. dollar time deposits. Even if policy rates fall, investors may still benefit from price appreciation in addition to coupons, as yields fall as policy rates fall, potentially offsetting ...