Keyword Analysis & Research: investment grade bonds definition

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Why is an investment grade bond considered a safe investment?

Investment grade bonds can provide reliable cash flows with relatively low levels of risk, making them a good fit for conservative investors, income investors and retirees looking to balance out their portfolios.

What are bonds called that are rated below investment grade?

Sub-investment grade/high yield bonds are bonds with a credit rating below investment grade (Baa3 or BBB-), as judged by the bond ratings assigned by one of the major rating agencies: Moody’s Investors Service (Moody’s) and Standard & Poor’s. The ratings are the opinion of the agency.

Are bond funds riskier than bonds?

While some bonds may be a safer investment than bonds, there are a lot of variables that could affect the relative risks of the two securities. When investing in any type of security, it's important to consider the unique risks of the investment, the price of the investment, and the broader market conditions.

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