Bonds are no longer just a means of diversifying pension funds away from equities, they are useful as risk management tools and in total return strategies
The evolving nature of bond products means it is possible to diversify the bond component of a portfolio across different markets and products. As well as the usual divisions such as government and corporate, or investment grade and high yield, advisers can consider more specific bond markets. In addition, there are now several bond funds that use Ucits III rules to create synthetic shorting of bonds as part of a total return strategy that offers low correlation to underlying bond indices or markets. There are even structured products that can be utilised to replicate a bond-like income str...
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