Risks associated with investing in a bond
If you decide to sell your bond before maturity on the secondary market, you should be aware that its value will heavily depend on market rate developments. If the rate increases above your bond's interest rate, its value will decrease as it will be less sought after on the secondary market. On the other hand, if the rate decreases, your bond's value will increase.
A bond is also exposed to inflation risk. This means that an increase in inflation leads to a loss of return for all savers and investors. The higher the inflation rate, the greater the risk of a negative real rate (nominal rate corrected for inflation).
In the event of the issuer's bankruptcy or restructuring imposed by the resolution authority to avoid bankruptcy, you may lose all or part of your investment.
All information on the main risks associated with bonds can be found on the "Bonds" knowledge sheet. Are you considering investing in a specific bond? You can find a detailed description of all its characteristics and the risks it presents in the documentation and prospectus dedicated to it.
