A bond is a debt security through which you lend money to a borrower, which could be a corporation, municipality or government, for a specified amount of time at an agreed-upon interest rate. It can be thought of as an “I-owe-you.” Once the bond reaches maturity, the issuer must repay the principal.
Similarly, a Sukuk is an Islamic or Sharia-compliant bond.
We offer a variety of conventional bonds including Floating Rate Notes (FRNs) and Medium-term Notes (MTNs).
Bonds are a popular option for many personal and institutional investment portfolios, offering a number of advantages that include:
Lower risk than stocks, as fixed assets are less sensitive to macroeconomic shifts. You are also guaranteed repayment of the principal, and in cases of bankruptcy, debt holders are paid ahead of shareholders.
They provide a predictable fixed income stream at regular intervals through coupon payments.
Bonds typically have an inverse relationship with stocks, which can help create a balanced portfolio and offset exposure to volatile stock holdings and cyclical asset classes.
If held to maturity, you get back the entire principal, which helps preserve capital while investing.
The yield can be particularly attractive during periods of declining or low interest rates.