FCA warns over corporate bond fund risks

The Financial Conduct Authority (FCA) has issued a fresh warning to consumers about the risks of investing in corporate bond funds.

Corporate bonds have been among the better performers in markets this year, with the average fund in the IMA Sterling Corporate Bond sector returning 5.5% over a year to 24 July. However, the asset class has come under scrutiny over the past couple of years amid concerns about liquidity, and more recently over the risks of investing in contingent covertibles (CoCo) and Tier 1 bank debt. In a notice published by the FCA today, the regulator highlighted the ongoing liquidity risks facing the sector. "[Corporate bond] funds are not risk free and the risk factors associated with them s...