Profits from bond investments mainly come from holding them till maturity and earning periodic interest payments, usually twice a year.
Consider the expense ratio while investing in gilt mutual funds. Opt for funds with competitive ratios to prevent reducing potential returns.
Align your investment horizon with that of gilt funds, which generally mature in three to five years. Matching horizons optimizes returns.
Understand the maturity date, indicating when you receive returns from your bond investment. Be aware of how long your funds are committed.
Evaluate the creditworthiness of bonds through their ratings. Lower-rated bonds pose higher default risks, potentially risking your investment.
Assess a company's bond history before investing, understanding its performance and reliability in meeting bond commitments.
Higher-risk bonds offer increased yields, but consider your risk tolerance carefully. Avoid investing solely based on yield.