We will start this article by asking the following question: why is buying corporate debt so attractive to investors? The answer is very simple. This type of financial instrument could offer a combination of security and profitability that are hardly found in other investment options, such as equities.
Buying corporate debt: An investment trend today
Although there are advantages and disadvantages to buying private company bonds, in the investment industry, acquiring corporate debt has established itself as a widely used strategy among investors seeking to optimize the performance of their portfolios through investment alternatives that offer both growth and diversification.
A corporate debt is a type of financing that companies obtain by issuing bonds in the financial market. These bonds are placed into circulation for the purpose of raising capital to be used for business purposes.
When companies require capital, they may choose to issue corporate bonds instead of seeking financing through banking institutions or issuing new shares. Once the bonds are issued, they are offered to investors, who may be individuals, financial institutions or investment funds, at a given price.
By acquiring corporate debt, the investor becomes a creditor of the company. As a result, the company agrees to repay the borrowed principal together with the agreed interest at a specific maturity date. Bonds represent a financial obligation for the company, which must meet periodic interest payments and repayment of principal at maturity.
It is an attractive investment option because it is not subject to the volatility of other financial instruments and offers more predictable and stable flows.
Ways to buy corporate debt
There are different alternatives for buying corporate debt. Among them are:
- Fixed income funds: These are investment vehicles that consolidate the capital of multiple investors for the purpose of acquiring a diversified portfolio of corporate bonds. By investing in these funds, investors gain exposure to a wide range of bonds issued by different companies. This allows the risk associated with investing in a single bond to be reduced, since the exposure is spread across different issuers and types of debt.
- Corporate bonds: This is the direct form of purchasing corporate debt. By investing in a corporate bond, the investor provides funds to the issuing company, which commits to repay the borrowed principal together with interest within an agreed term.
- Corporate bond ETFs: These are traded like stocks on the stock exchange. They provide diversification and reduce the risk associated with investing in individual bonds.
Roboadvisors: The ideal option for accessing financial products and buying corporate debt
Before investing in corporate debt, it is crucial to evaluate all available options to ensure that the investment aligns with your financial objectives and risk profile. Roboadvisors represent a highly effective and cost-efficient option, as they employ advanced technology to access financial products, optimize selection and passively manage portfolios.
These systems dynamically adjust bond selection based on each investor’s individual objectives, optimizing the portfolio to align with specific return and risk profile goals.
The main features of this platform to buy corporate debt and other products are as follows:
- Ease of use: One of the main advantages of roboadvisors is their intuitive and user-friendly design. These systems are designed so that no prior portfolio management experience is required to use them. Their simplified interface makes it easy to set investment objectives, select corporate bonds and monitor portfolio performance.
- Access to analysis tools: As an online management platform, they provide real-time information on the evolution and performance of investment funds. For investors, this is key because it allows them to make informed decisions based on updated data, adjust strategies and evaluate their objectives considering market conditions.
- Low costs: One benefit of buying corporate debt through roboadvisors is that they have more attractive fees than other financial instruments. Thanks to their automatic nature, costs are low, which favors long-term investment performance.
- Automated management: Because they operate according to algorithms, many of the processes are fully automated. This means that no active intervention by the investor is required for the platform to function.
- Diversification: Roboadvisors create diversified and broad portfolios, providing access to a variety of corporate bonds, which optimizes the risk/return trade-off. By including a variety of bonds in the portfolio, exposure to the specific risks of a single issuer or sector is reduced. This means that if one bond or sector faces difficulties, the impact on the overall portfolio is minimized.
inbestMe: The roboadvisor you need to buy corporate debt
You know how corporate debt works. Now it’s time to choose a roboadvisor that allows you to efficiently manage your investment in corporate bonds. One alternative that stands out in the Spanish market is inbestMe, the automated management platform that offers solutions for investors seeking to optimize their portfolio and make their investment profitable.
Why choose inbestMe to buy corporate debt?
- Wide variety of investment products.
- Despite being an automated platform, it offers specialized customer support to resolve doubts and provide guidance to users.
- It is a reliable and transparent system. Users know the fees and commissions from the beginning, avoiding surprises and hidden costs.
- Fast, intuitive interface with access to all the indicators you need to control and manage your funds.
