Corporate Bond Fund — Mutual Fund Term Explained

A debt fund investing at least 80% in the highest-rated corporate bonds (AA+ and above). Balances safety with slightly better yield than gilt funds.

Corporate bond funds invest at least 80% of their assets in the highest-rated corporate bonds (AA+ and above). Slightly higher yields than government securities while maintaining reasonable credit safety.

Suitable for 1-3 year horizons.

Related terms

• Gilt Fund — A debt fund investing only in Government Securities. Zero credit risk since backed by the government, but significant interest rate risk.
• Credit Risk — The risk that a bond issuer defaults or is downgraded, causing the fund's NAV to fall sharply. Higher-yield bonds carry more credit risk.
• YTM (Yield to Maturity) — The annualised return if a bond is held to maturity. Used as a proxy for expected future returns of a debt fund.

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