·The Dash
Private credit vs bonds: what should an investor choose
Bonds are liquid and transparent but yield is capped. Private credit pays more for illiquidity. We compare yield, risk, and liquidity.
Both bonds and private credit are, at heart, “lending at interest.” But they’re built differently. Here are the key distinctions.
Bonds
- Liquidity. Traded on exchanges; you can sell any day (at the market price).
- Price transparency. A quote is always visible — but it also swings with the market and rates.
- Capped yield. The safer the issuer, the lower the coupon. High yield comes only from “junk” bonds with high risk.
Private credit
- Illiquidity premium. Precisely because capital can’t be withdrawn at will, the yield is higher.
- No daily mark-to-market. Value doesn’t “jump” every day with the exchange — but you can’t exit quickly either.
- Direct contact with the borrower. No chain of intermediaries between you and the business.
Side by side
| Bonds | Private credit | |
|---|---|---|
| Liquidity | High | Low |
| Target yield | Lower | Higher |
| Price volatility | Yes (market) | No daily mark |
| Minimum entry | Low | Higher |
What it means in practice
Bonds are good when you need liquidity and can tolerate market price swings for a moderate return. Private credit is for when you can “park” capital for a term and want a higher target yield in exchange, accepting default and liquidity risk.
Many hold both: bonds as the liquid sleeve, private credit as the yield sleeve of a portfolio.
Where The Dash fits
The Dash is private credit: a target 15%+ in USD, quarterly distributions, secured loans to businesses in Central Asia, and the manager’s own first-loss capital.
Returns are targets and not guaranteed. Investments are illiquid and carry the risk of capital loss. This material is informational and is not an offer or investment advice.