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Corporate Bonds vs Mutual Funds: What do you opt for?

Postby ptrikha21 » 01 Jul 2019, 10:38

I sometimes see some companies bringing out Corporate Bonds, with a fixed Interest rate. They talk in terms of some coupons or units.
On the other hand, we have Mutual Funds- debt, equity, balanced etc, where our investments are further invested in shares and Government securities.
Which of these have you tried, and which one did you find better?
As for myself, I find Mutual Funds to be more of a known and perhaps more reliable entity.
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Re: Corporate Bonds vs Mutual Funds: What do you opt for?

Postby JASPREET » 01 Jul 2019, 11:33

Am not aware of corporte bonds and never tried Mutual Fund. These days am saying many advertisements of Mututal funds
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Re: Corporate Bonds vs Mutual Funds: What do you opt for?

Postby ptrikha21 » 02 Jul 2019, 12:40

JASPREET wrote:Am not aware of corporte bonds and never tried Mutual Fund. These days am saying many advertisements of Mututal funds



Do you plan to invest in Mutual Funds in the future?
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Re: Corporate Bonds vs Mutual Funds: What do you opt for?

Postby A K Rao » 02 Jul 2019, 16:19

In fact investment in mutual funds is having margin of safety as a part of fund is invested and other portion is kept as buffer in case of emergency! Since I am not in a position to study the market trends so I am happy with the Fixed deposit with Post offices and The Banks! This suits me as per my age!
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Re: Corporate Bonds vs Mutual Funds: What do you opt for?

Postby skysnap » 04 Jul 2019, 07:17

For me corporate bonds is a no go zone. Till the point they are through fund house I can;t trust them. I think for me mutual funds in their current form are good enough.
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Re: Corporate Bonds vs Mutual Funds: What do you opt for?

Postby ptrikha21 » 05 Jul 2019, 08:00

skysnap wrote:For me corporate bonds is a no go zone. Till the point they are through fund house I can;t trust them. I think for me mutual funds in their current form are good enough.


So you have never been tempted to invest for any Corporate Bonds, even if you have funds and the Fund has got a good rating?

--- 05 Jul 2019, 13:31 ---

A K Rao wrote:In fact investment in mutual funds is having margin of safety as a part of fund is invested and other portion is kept as buffer in case of emergency! Since I am not in a position to study the market trends so I am happy with the Fixed deposit with Post offices and The Banks! This suits me as per my age!


So you have never tried in shares and M/F or have you been into these earlier?
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Re: Corporate Bonds vs Mutual Funds: What do you opt for?

Postby Happyland » 06 Jul 2019, 14:50

A mutual fund is not necessarily better or safer than a corporate bond; the opposite holds true as well. It all depends on many factors some of which includes the company's credit rating, the condition of its balance sheet, the quality of its earnings and the direction of interest rates. A mutual fund brings no guarantee of success; especially during periods of a market pullback. What is can do is provide some diversification if it is managed as a well-diversified fund.
As a side note there are mutual funds that are corporate bond funds. Bonds tend to due well when interest rates are falling.
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Re: Corporate Bonds vs Mutual Funds: What do you opt for?

Postby skysnap » 06 Jul 2019, 15:30

ptrikha21 wrote:So you have never been tempted to invest for any Corporate Bonds, even if you have funds and the Fund has got a good rating?


I am definitely tempted but can't trust corporate bonds unless things change around. I mean I have some experience that keeps me from investing with that reason.
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Re: Corporate Bonds vs Mutual Funds: What do you opt for?

Postby Happyland » 06 Jul 2019, 15:53

Economic conditions can have a dramatic impact on bond yields. The central bank and its use of monetary policy can have a profound impact. Even just expectations can cause movements (up or down) in markets.
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Re: Corporate Bonds vs Mutual Funds: What do you opt for?

Postby Alexandoy » 08 Jul 2019, 07:29

Mutual funds is better if the firm can be fully trusted like if it's a big bank. Corporate bonds are like playing the stock market that you lose when the company goes bankrupt.
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Re: Corporate Bonds vs Mutual Funds: What do you opt for?

Postby skysnap » 10 Jul 2019, 09:33

Alexandoy wrote:Mutual funds is better if the firm can be fully trusted like if it's a big bank. Corporate bonds are like playing the stock market that you lose when the company goes bankrupt.


I have different experience, banks have the most fluctuating returns. So I prefer to get in mixed equity or mixed sector funds.
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