Edit: I am also asking about corporate bond ETFs.<p>I found many sources that go against buying corporate bonds, because it's too risky/expensive. They prefer government bonds and shares. But investment advisers keep using them.
Yes, I hold variety of Bond ETFs in my portfolio including High Yield Corporate and Government Bond ETF (HYG), Emerging Market Bond ETF (EMB), Investment Grade US Bond (AGG), Inflation adjusted US Treasury I-series Bond. I believe in keeping a diversified portfolio of different asset classes. All asset classes have different risk and return profile and have different correlations with each other.<p>As for corporate bond being more risky/expensive than government bond, ask investors who invested in Greece Debt vs those who invested in Apple debt.<p>You may want to consider reading up a few books in investing and finance. /r/personalfinance, /r/investing, /r/financialindependence, and /r/finance are a few good subreddits with some smart regulars. Also these subreddits have good list of recommended books.
You can invest in them, of course. I think the confusion is that fixed income may serve two different purposes.<p>According to Markowitz, you buy fixed income as "risk free" asset, to offset an optimal portfolio of risky assets. That way, once you have a target combination of risky assets, you just need to decide that % to put on that, and you put the rest to the risk-free asset.<p>Government bonds are usually very low risk. Of course, they are never risk free, plus you hold inflation risk. But Germany, US, etc. have negligible risk compared to corporate bonds or emerging / distressed government bonds. So they are good to plug into the "risk free" basket of that methodology.<p>Corporate bonds (as well as some government bonds) are much more risky, so you cannot use them like that. But they can be part of the risky portfolio, as they give much more interest and volatility, with which you can earn more (or lose it!).<p>So it's a matter of treating them as a different thing as government bonds, and understanding that when people talk about fixed income, they refer to the low risk government one, unless it is obviously otherwise.
I don't hold corporate bonds. That seems really easy to screw up if you don't know what you are doing. I think it is a reasonable option for financial professionals to choose if they are looking for slightly higher returns and are willing to invest the time to do due diligence, but for everyday investors I agree definitely stay away before you lose your whole investment.
I have a handful of high-yield corporate closed end funds. The biggest downside is that some of the payments are non-dividend distribution (such as return of capital) which are tax-free but lowers the cost basis when you sell.