Choosing fixed income assets: A nimble approach to a dangerous world

Will government bonds still offer investors a steady and secure income in years to come?

clock
Jon Mawby of Pictet Asset Management
Image:

Jon Mawby of Pictet Asset Management

Investors are having to rethink the role of bonds in their portfolios

Historically, government bonds have offered steady and secure income; a safe store of value; and a source of diversification to equities. As a result, modern portfolio theory suggested an optimal allocation of 60% equities and 40%  bonds. And since at least the early 1980s, that has been an enormously successful strategy. But we do not think it will be nearly as kind to investors in the years to come. That is because government bonds no longer provide the benefits I just listed, that investors have come to take for granted. Central banks across the developed world have cut official inter...

To continue reading this article...

Join Investment Week

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Investment

All the latest from the world of ESG investing

ESG Blog: UN secretary urged governments to impose windfall tax on 'immoral' energy companies

Round-up of ESG coverage

Investment Week
clock 04 August 2022 • 1 min read
The extraordinary general meeting (EGM) will take place on Friday 5 August.

Trian 1 story continues as shareholders call for support ahead of extraordinary general meeting

'Not fit for purpose'

clock 26 July 2022 • 4 min read
Lorenzo Brunelli, ESG product strategist at PIMCO

Partner insight: Looking beyond the labels

Investors should look beyond ESG-labelled debt and at opportunities like unlabelled green bonds and climate leader bonds

PIMCO
clock 19 July 2022 • 1 min read
Trustpilot