Choose the asset class that best meets your investment goalsIf you’re looking for an investment that offers you more security than equities, take a look at bonds. Governments and large companies issue bonds to raise money and buying these bonds is like lending your money to the issuer.
A bond usually pays a fixed amount of interest (usually twice a year) and has a fixed life at the end of which your initial capital is repaid, so they are seen as relatively secure investments that are more suitable for people investing for income.
They are also generally seen as more secure than equities as they are affected by changes in inflation rather than by fluctuations on the stock market. So, low inflation can be beneficial and falling inflation even better.
Corporate bonds (issued by companies) generally earn higher interest than government bonds because they’re considered more vulnerable to credit risk, the level of which will depend on the performance of the company.
When you invest in an M&G bond fund, your money is pooled with other investors' money and invested in a wide range of individual bonds. This way any risk to your investment is reduced, since you aren't reliant on the fortunes of a single company or government. What's more you also benefit from having an experienced bond fund manager watch over your investment.