How to buy them

Government bonds can be bought and sold on the ASX as exchange traded treasury bonds (eTBs), and they are traded in the same way as regular stocks.

Corporate bonds can be purchased directly from the issuer through a public offer at face value. You can also trade them on the secondary market via the ASX, where they’re called XTBs.

Another option is to invest in a professionally managed fund, which pools investors’ money to purchase a collection of bonds. Managed funds typically have management and sometimes performance fees.

Bond exchange traded funds, which passively track indices, are a cheaper way to gain diversified exposure to the market. BetaShares, ETF Securities, iShares, Vanguard and State Street all offer bond ETFs.