it depends. We have a very special situation with very low interest rates. Usually you want government bond because they tend to move in the other direction in respect to stock market, making for nice rebalancing opportunities. Swiss bond in particular have always exprienced huge cash inflows (driving up the price) during stock market crash because of the strength and the appeal of the Swiss franc.
Another point is that in general if you buy corporate bond, is because you want more returns than a government bond, but you want more return you should start with tilting your allocation towards more stocks (like doing 65/35 instead of 60/40). And I don't think they hold up as good as government bond during a recession (stock market crash, company fail, corporate bond becomes practically useless, although they are bound to be paid off before stock-holder).
In general I avoid them because they are much more correlated to the stock market so they don't really help me in reducing volatility.
So my actual choices are:
Vanguard Total Bond Market ETF (BND) USD (30 billions)
iShares Swiss Domestic Government Bond 1-3 years CHF (60 mio assets)
iShares Swiss Domestic Government Bond 3-7 years CHF (410 mio assets)
iShares Swiss Domestic Government Bond 7+ years CHF (122 mio assets)
I want bonds for stability obviously, but you said swiss bonds are something different from other bonds. Based on your feedback I decided to ignore corporate bonds.
Apart for that I am not sure what to buy anymore: you also said short-term bonds are riskier, and also that swiss bonds are riskier because their price go up in recessions and right now they might be overpriced. But USD bonds are risky because of currency risks.
So it seems my choices are:
iShares Swiss Domestic Government Bond 3-7 years CHF
iShares Swiss Domestic Government Bond 7+ years CHF
or
Vanguard Total Bond Market ETF (BND) USD
iShares Swiss Domestic Government Bond 3-7 years CHF
I am not sure I will hold my investment for 7+ years (I want to, but I can't be sure of that). Does this matter?
(I also don't trust buying only iShares Swiss Domestic Government Bond 3-7 years CHF and nothing else)
Thank you for your feedback.