Lower Risk Investment Recommendations (Bonds)

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Nickname

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I am looking for any advice on how to invest money for approximately 3 years or so. I would favor lower risk investments as I have plan for the money but it wouldnt be a catastrophic if i lost 10 or 20%. i am familiar with fixed term deposits and NTMA bonds but the return is lower than I want. I think Corporate bonds, emerging market bonds or a bond ETF would probably be closer to the what I am looking for (+3%). Any other recommendations for would be appreciated and useful resources for independent learning.

Thanks.
 
Hi Nickname and welcome to AAM.

If you need 90% of the money in 3 years I suggest that you put that 90% on deposit.

The remaining 10% you can invest in a higher risk investment. Especially if you expect to be able to leave it invested for the longer term.
 
Hi @Nickname

The yield-to-maturity of the Bloomberg Barclays Euro Corporate Bond Index is currently around 0.87% and has an effective duration of around 5.25 years. An ETF that tracks that index will have a TER of around 20bps and exit tax is currently 41%.

In contrast, 5-year State Savings Certs currently pays interest @0.98%pa if held to term. Tax-free, with zero investment costs.

For shorter holding periods, I would suggest sticking with (State guaranteed) deposits. PTSB currently have a 3-year fixed term deposit @0.70% and DIRT is scheduled to fall to 33% by the time it matures.

3 years is far too short an expected holding period for high risk investments like EM bonds or equities.
 
Yeah fair point, I can lose more than 10% of the investment without a negative impact on future plans but in my head that is what a low risk investment would be i.e. something that might drop by 10% or so over a short period (probably not technically accurate...). I have most of my pensions in the stock market and I planning to put some more money into etfs so really looking for something safer than that.
 
Are you carrying any debt?

Paying down debt (including a mortgage) is the safest investment of them all.
 
I have some cash put aside for a deposit for a house and a few other bits and pieces and no immediate plans to use but I will probably need it in the future. I would like to invest in property but I think that it is not the best time from a personal point of view or market point of view... I think the saving certs could be the best fit, maybe I was looking for something more exciting!
 
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