How bonds and equities differ

In summary, equity holders and bond (or fixed interest) holders take on different risks. A fixed interest holder has lent the company money, and is expecting a stream of income or interest payments. These interest payments are subject to changes in interest rates, and the capital value of the bond is subject to the market's perception of the company's ability to pay the interest and the capital. Consequently a bond's price is often close to its nominal value. You will rarely find a bond selling at two times its nominal value.

Equities

Bonds

An example

Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested