2023-09-09 05:00:00
More than a third of respondents (34%) believe that now is the right time to invest in the bond market, reports the ING investor barometer.
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It is clear that interest in the bond market has increased in recent months, confirms Charlotte De Montpellier, macro-economist at ING. “Interest has increased significantly since January 2023,” she explains.
“The increase in rates from the European Central Bank has led to an increase in bond rates. This has once once more become interesting enough for companies and governments to issue bonds once more,” explains the economist.
“Therefore, there is much more success than in recent years on this market,” she adds.
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With the government bond boost, we can expect the bond market to continue to thrive via corporate bonds. The latter generally enjoy better returns but are also accompanied by greater risk.
Where to invest?
“You can subscribe to a corporate bond either via a direct voucher, you then have to wait for a voucher issuance period. Either by investing in a bond or mixed fund,” explains Charlotte De Montpellier. “We also notice that mixed fund managers are also turning more frequently to bonds which now have a good return and which above all allow you to diversify your portfolio.”
So is the bond market the best way to make your money grow? Unfortunately, it’s a little more complicated than that.
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In fact, it all depends on the investor’s expectations and risk profile. Unlike the Belgian government bond, “State bonds from certain countries or companies may carry a liquidity risk. Please note that if the issuer of the voucher goes bankrupt, they will not be able to refund your money.
On the other hand, “Any bond or term investment carries a risk on resale. The rate you subscribed to may not be the market rate if you wish to resell. This then represents a risk of losing money,” analyzes the economist.
Charlotte De Montpellier, however, would like to point out that “the more we invest over a long period of time, the more we can afford to take risks, as the market tends to stabilize following a period of crisis”. Also, the more risk you take, the more you risk winning or losing big.
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