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Fixed interest securities are generally considered to carry a lower
risk profile than other asset classes. This is due to:
- Higher liquidity than property
- Lower price volatility than shares
- Ranking before shareholders upon the bankruptcy of the issuer
Exchange traded fixed interest securities
can be bought and sold just like shares, so they are much easier to
purchase and dispose of than shares. Unlisted securities, however,
can have low liquidity.
The price movements of fixed interest securities are usually more stable
than those of shares. A capital loss on your investment may be less likely.
In the event of a company winding up, creditors of the company (including
fixed interest holders) rank before shareholders in receiving compensation
for their investment. This adds to the lower risk profile of fixed interest
securities.
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About Fixed Interest
