| Category |
Description |
| Issuer |
- Government Bonds: Issued by governments, such as UK Gilts issued by the UK government.
- Corporate Bonds: Issued by corporations to raise capital for various purposes.
|
| Maturity |
- Short-Term Bonds: Have a maturity of typically 1 to 3 years.
- Intermediate-Term Bonds: Maturity ranges from 3 to 10 years.
- Long-Term Bonds: Maturity extends beyond 10 years.
|
| Coupon Rate |
- Fixed-Rate Bonds: Offer a consistent interest rate throughout the bond's life.
- Floating-Rate Bonds: The interest rate is tied to a benchmark (e.g., LIBOR) and can adjust periodically.
|
| Credit Quality |
- Investment-Grade Bonds: Issued by companies or governments with a lower risk of default, often rated BBB- or higher by rating agencies.
- High-Yield (Junk) Bonds: Issued by entities with higher default risk, typically rated below investment-grade (BB+ and lower).
|
| Currency |
- Domestic Bonds: Issued in the local currency (e.g., British Pound) of the country where the bond is issued.
- Foreign Currency Bonds: Issued in a currency other than the local currency.
|
| Secured vs. Unsecured |
- Secured Bonds: Backed by specific assets that act as collateral in case of default.
- Unsecured Bonds: Not backed by specific collateral but rely on the issuer's creditworthiness.
|
| Callable vs. Non-Callable |
- Callable Bonds: Can be redeemed by the issuer before the maturity date.
- Non-Callable Bonds: Cannot be redeemed by the issuer before maturity.
|
| Convertible Bonds |
Bonds that can be converted into a predetermined number of shares of the issuer's common stock. |
| Zero-Coupon Bonds |
Bonds that do not pay periodic interest but are issued at a discount and mature at face value, with the difference being the investor's return. |
| Sovereign vs. Sub-sovereign Bonds |
- Sovereign Bonds: Issued by national governments.
- Sub-sovereign Bonds: Issued by regional or local governments within a country.
|
| Inflation-Linked Bonds (Gilts) |
Bonds whose principal and interest payments are adjusted for inflation. |
| Green Bonds |
Bonds issued to fund environmentally friendly projects. |