Soft magnetic composites (SMCs) were prepared from three different ferromagnetic powder particles: iron powder ASC 100.29, spherical FeSi particles and vitroperm (Fe73Cu1Nb3Si16B7) flakes. Two types of hybrid organic-inorganic phenolic resins modified with either silica nanoparticles or boron were used to design a thin insulating layer perfectly covering the ferromagnetic particles. Fourier transform infrared (FTIR) spectrometry confirmed an incorporation of silica or boron into the polymer matrix, which manifested itself through an improved thermal stability of the hybrid resins verified by thermogravimetric-differential scanning calorimetry (TG-DSC) analysis. The core-shell particles prepared from the ferromagnetic powder particles and the modified hybrid resins were further compacted to the cylindrical and toroidal shapes for the mechanical, electrical and magnetic testing. A uniform distribution of the resin between the ferromagnetic particles was evidenced by scanning electron microscope (SEM) analysis, which was also reflected in a rather high value of the electrical resistivity. A low porosity and extraordinary high values of mechanical hardness and flexural strength were found in SMC consisting of the iron powder and phenolic resin modified with boron. The coercive fields of the prepared samples were comparable with the commercial SMCs. (C) 2014 The Chemical Industry and Engineering Society of China, and Chemical Industry Press. All rights reserved.