When you invest in corporate bonds, it is important to know that secured bonds are backed by some form of collateral; for example, a property or some kind of revenue stream. Should the issuer default on interest or principal payments, the bondholders may lay claim to that collateral, mitigating some or all of their losses. Unsecured bonds, by contrast, are backed by no collateral. This is not to say they are necessarily risky – e.g. most government bonds are, technically speaking, unsecured.

What else do you need to know about bonds?

Want to learn more before deciding what’s your optimal bond allocation? You might want to check out these other articles to deepen your knowledge.

 

 

Author of this article

Gergely Korpos

Author of this article

Gergely is the co-founder and CPO of BrokerChooser. His aim is to make personal investing crystal clear for everybody. Gergely has 10 years of experience in the financial markets. He concluded thousands of trades as a commodity trader and equity portfolio manager.

Gergely Korpos

Co-founder, CPO

Gergely is the co-founder and CPO of BrokerChooser. His aim is to make personal investing crystal clear for everybody. Gergely has 10 years of experience in the financial markets. He concluded thousands of trades as a commodity trader and equity portfolio manager.

Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology

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