With interest rates remaining at their highest levels in over two decades, and with U.S. Treasury bonds comfortably exceeding a 4% yield, an increasing number of investors are turning their attention to the realm of corporate bonds. In this landscape, they seek not only promising yield opportunities but also the strategic advantage of diversifying away from equity investments. The Financial Times recently reported that inflows into corporate bond funds have surged to $22.8 billion in 2024, marking the first positive start to a year since 2019. Corporate Bonds: Investment Grade Vs. High Yield Corporate bonds come in two main types: investment-grade and high-yield. Investment-grade bonds are issued by financially stable companies, while high-yield (or speculative grade) bonds come from riskier firms but offer higher returns. Rating agencies like S&P, Fitch and Moody’s determine which category a bond falls into based on the issuer’s ability to repay debts. Ratings range from AAA (very safe) to D (in default). For example, companies like Nvidia Corp. (NASDAQ:NVDA), Amazon Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), ...