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long before half of the total payout - coupons and redemption value - is received) Choosing an ETF with a similar duration to your ideal individual bond would give a similar effect. The lower the duration the less risky the bond or fund and the lower the sensitivity to the bank base rate - as bank base-rate goes up generally the bond-price goes down and vice versa: The Change in bond-price is the duration multiplied by the bond price and the change in bond yield

Corporate bonds are paying historically high yields at the moment, many times higher than you can get from a bank deposit account, but with the possibility of capital gain as well. Usually this should cause concern, but the main reason for this is that bonds have been sold off by hedge funds because they need cash to remain solvent and bonds are easier to sell in a market like this. While stock markets have suffered during recent economic turmoil, bond markets have been more secure. They have not been immune to the banking troubles, but should be far more resilient to further trouble. There are of course risks, but the current price of many bonds would imply a very high rate of insolvency, higher even that during the 1930s. This is of course possible, but seems unlikely. Blue chip shares are also paying a high dividend at the moment, but dividends can be cut with very little warning. With the government starting it's Quantitative Easing (i.e. buying billions of pounds worth of Gilts and corporate bonds) this may be an excellent opportunity to buy.

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