Elevated Yields Seen as Key Driver of Bond Returns
Dow Jones
Sep 23
0530 GMT - Current income has once again become a genuine driver of bond returns, rather than merely meager compensation for interest-rate risk, apoBank's Clemens Berendt says in a note. Higher running yields create a solid foundation for the future performance of a bond portfolio, the lead portfolio manager says. "With every coupon payment received, the income buffer grows, helping to cushion potential price fluctuations within the portfolio," he says. The historically weak bond market of 2022 demonstrated not the failure of bonds, but rather the consequences of extremely low starting yields combined with high duration, he says.
At the request of the copyright holder, you need to log in to view this content
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.