BF: It's common for SDs to have a capital protection feature. This means your principal sum invested is unlikely to lose money.

But this is not guaranteed by the issuer. To have this protection, many SDs will invest into many companies' bonds to ensure the principal sum is protected when it matures.

But if one bond defaults, you will lose part of your capital as well.


http://tnp.sg/news/story/0,4136,178415,00.html