Your corporate bond questions.

• They are loans to a government or company.
• You might hear them referred to as corporate bonds, income investment funds or income ISAs
• Loans to the UK government are known as gilts.
• In exchange for their loan the government or company will usually pay an agreed level of interest to the lender. They’ll pay back the loan at the end of a stated period.
• These types of investment aim to provide a regular and reliable income.

• If the company fails, interest payments on the loan will stop and the full debt will not be repaid to the lender.
• Corporate bonds are designed to deliver consistent returns with low risk.
• Every bond is given a rating by a credit agency like Moody’s, Standard & Poor’s or Morningstar. The credit rating agency assesses how likely the company or government is to meet their interest payments, and ultimately pay back the loan.
• The most secure rating is ‘AAA’.

• No - the income levels from this type of investment vary because bonds and gilts are continually bought and sold by the fund manager at different rates.
• If interest rates rise, the value of your investment is likely to fall in the medium to long term. If interest rates fall, then the value of your investment is likely to rise.
• Your capital is not guaranteed and you may not get back the money you invested. 
• This is a medium to long-term investment, ideally of five years or more.

• They’re the same thing.· A yield indicates the income received from your corporate bond investment. They’re calculated before tax and can vary over time.
• We always quote the distribution yield to estimate the amount of income that the fund could pay you over the next 12 months.
• The calculation is made assuming that the investments that make up the fund stay the same.
• You could be taxed on your income.

• You can invest your yearly stocks and shares ISA allowance up to £10,680 in our income funds – this investment will be tax-efficient.
• If you’ve exceeded your ISA allowance then you could take advantage of investing an unlimited amount in a unit trust with us.
• You can invest up to £10,680 in an ISA online, today.
• You can invest up to £50,000 online, today.

• Our High Income  investment fund, which aims to provide a high quarterly income.
• Our Fixed Interest  investment fund, which provides a quarterly income.
• Our Monthly Income  investment fund, which provides a quarterly income.
• Our Managed Monthly Income  investment fund, which provides a monthly income.

These investment funds invest in a range of bonds that offer different levels of risk and have different charges