Looking at the vanguard index chart, it shows that Australian bonds and cash have performed exactly the same (7.3%) which seems very high, but also not sure which bonds they use specifically or what interest rate they use? If this is the case, what is the benefit of owning bonds over HISA? Is it worth considering international bonds?
The main difference between a savings accound and bonds is duration. Over say the next 10 years the interest recieved on your savings account can be whatever, but if you buy a bond (fund) you lock in a certani interest rate level for a certain period. In the end one alternative can prove better or worse than the other depending on what happens and the value of bonds will fluctuate with long-dated interest rate levels and credit spreads if you hold corporate bonds. The "market value" of money in a savings account will always be identical to the amount you have in your account.
If you buy a bond fund holding international bond you generally want the fund to be FX hedged to your home currency. In that process you end up paying the foreign currency short-term interest rate and recieving your home currency interest rate.
Currently 10y aussie govvies yield around 4.4%. Corporate bonds will yield higher depending on how risky they are viewed. In general defaults on investment grade corporate bonds is pretty rare so if you buy a well-diversified bond fund expected losses are very low but the value of the holdings can move a fair bit depending on interest rates and credit sprads.
In general a certain bond allocation is considered an essential part of a well-diversified portfolio but one can argue (a lot) over what percentage it should be.
