Today’s investors face a challenging prospect of an oncoming recession and elevated market volatility, which may lead them to question their risk appetite and asset allocation. Against this backdrop, Fidelity’s fixed income team highlight the reasons why now is a good time to be allocating to cash in your investment portfolio.

This should at least be good for fixed income

The euro area and US central banks have applied similar monetary policy tightening over the past 18 months with distinctly different results. We see three key reasons why

Though it’s necessary to be selective in such a huge market

It is a mistake to focus on mark-to-market calculations rather than forward profitability

US budget deficit may mean yields stay higher for longer

Investors risk missing out if they don’t take full advantage in fixed income

Modest rate cuts would be justified in this scenario, says US investment giant

Some strategic bond funds are more effective than others

Two-thirds invest for the defensive qualities