We've have so far just short-listed a "not investment grade/but not junk" bond which matures in just over 2 years and has about 2 years duration, and hopefully the YTM we will see will be 5.0-5.5%. I think we'll just buy a 1k in that, just to get our toes wet, and see what happens
You need some idea of how the wider market is pricing bonds in order to evaluate the level of risk you might be taking on, to that end making a careful study of the figures published by ishares for their various bond ETFs should be instructive to you,
Take a look at this one to begin with
https://www.ishares.com/uk/individual/en/products/251839/ishares-corporate-bond-ucits-etf SLXX.
This ETF is a portfolio of the current most widely traded investment grade bonds on the market at the present time, that is the bonds within are the most liquid so as bonds are bought and sold within the fund the minimum transaction costs will apply. As the bonds within are all investment grade it is considered highly unlikely by the market that any of them will default
in the near foreseeable future But note the figure for
weighted average maturity is 13.5 years which is certainly beyond anyone's foreseeable future, for this inherent uncertainty one would expect a higher yield to compensate for the risk that some of the companies might suffer changes to their credit ratings and also that inflation may turn out to be more than the market has priced in, compare the yield available on this ETF to one with an average age to maturity of less than 3 years such as
https://www.ishares.com/uk/individual/en/products/251840/ishares-corporate-bond-15yr-ucits-etf IS15 which holds bonds of a similar credit rating the average yield to maturity is 1.94% as opposed to 2.71%.
Both ETFs have a charge of .2%, when that is added to the expected total return we are still no where near the yield to maturity of 5%+ that you are considering, unfortunately ishares do not state the average credit ratings of their funds but you could work it out from the graphs, at a glance it would seem to be about S+P A grade so any bond offering 5% or more over 2 years should be well below investment grade.
So lets look at a fund of 'Junk Bonds'
https://www.ishares.com/uk/individual/en/products/295888/ishares-high-yield-corp-bond-ucits-etf-gbp-hedged-(dist)-fund IHHG which represents the dollar denominated high yield market currency hedged to sterling, weighted average maturity is 4.5 years, average yield to maturity is 5.8% and whatever the average credit quality might be precisely it is clearly bellow S+P BB grade, note that the US is currently at a more advanced state in the credit cycle than we are so one would expect all corporate bonds to be priced for a higher yield because their government bonds are priced for a higher yield.
What all this should tell you is that your 5%+ 2 year bond is pricing in a relatively high level of risk compared to the wider market
WHAT IS THIS RISK ? perhaps it's something innocuous such as liquidity risk which for two years is not a big deal or maybe it's something more sinister.
Regarding duration, the important figures for retail investors are effective duration and modified duration which tell you how much the market value of the bonds will change when interest rates change by 1 %, I do not buy retail bonds so i just look at the figures stated for funds, effective duration is supposed to take into account the possibility that some companies will be able to call their bonds and re finance at lower rates should interest rates fall .
When retail bonds were first listed on the stock exchange I heard a bond fund manager saying on the radio that he could buy the same bonds marketed to retail investors for lower prices and higher yields, whether the lower price fully compensated for his management charge was not revealed but its another thing to consider.