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But they also tie up more capital, lift upfront costs, and delay payoffs.

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Money managers warned that investors are too comfy with corporate bonds, despite their yields, an indication of the risk involved, sitting only a fraction above those of government bonds.

You're usually paid a decent premium to hold riskier corporate debt instead of safer government bonds.

But today, that gap is the narrowest it's been since 2007, as in right before the financial crisis.

That means with corporate bonds, investors are taking on a lot more risk for only a sliver of extra return.

Despite that, plenty of investors are still happy to buy them.

You can see why.

Corporate profit and economic growth are trending upward, company defaults are rare, and pensions and insurers are still buying in, even at high prices.

Many also expect interest rates to fall, which would lift existing bond prices.

But that's exactly why big investors like PIMCO and Aberdeen Investments are waving warning flags.

See, when the extra reward for taking corporate risk is this small, it suggests investors are assuming the good times will last, leaving very little protection if they don't.

For most investors looking to take some risk, stocks are usually a superior option to corporate bonds.

Shares often keep rising as companies grow, can get kinder tax treatment, and are easier to follow.

Meanwhile, corporate bonds limit how much you can make, sometimes leave you with a bigger tax bill, and may not add as much diversification as you'd expect.

In fact, they often fall when stocks do.