Should tighter monetary policy on both sides of the Atlantic worry bond investors? We don’t think so. Bonds have historically delivered positive returns when interest rates rise—particularly when they rise gradually.
Investors who want to reduce risk and maintain a steady income might consider a barbell strategy that pairs interest rate–sensitive bonds with high-yielding credit assets. But first, it’s important to strike the right balance.
One of the biggest challenges for bond investors today is keeping income flowing without taking too much risk. We think a balanced barbell approach can help.
Intensifying demand to have everything at one’s fingertips seems to be the driving force behind the innovation in technology, finance and even industrials.
Intensifying demand to have everything at one’s fingertips seems to be the driving force behind the innovation in technology, finance and even industrials. Franklin Equity Group’s Matt Moberg, vice president and portfolio manager, Franklin DynaTech Fund, observes a general shift in the technology industry to address evolving consumer needs.
Rising interest rates. Stretched valuations. Populist politics. These are some of the challenges bond investors face today. They’re also reminders of why it’s so important to manage interest-rate and credit risk in an integrated way.
Rising interest rates make bond investors nervous. But purging your portfolio of interest-rate risk can backfire—even in a rising-rate environment. There’s a better way to balance risk and return.
A bottom-up look at major industries around the world reveals significant potential for productivity growth.
Inflation may be starting to develop in the U.S., which has significant implications for the High Yield bond market. As inflation takes hold, the Fed’s normal response is to raise policy interest rates to prevent inflation from spiking higher. So what does a period of rising rates mean for High Yield bonds?