Fixed income | The power of income

The beginning of the end of negative/ultra-low cash rates is likely to mean a greater focus on income as the major component of total return in fixed income going forward. We see opportunities in a number of areas.

20 Nov 2018
  • We believe the importance of income will become ever more prominent in investors’ minds and that there are a number of areas that can offer investors the economic return they require via a regular stream of coupon income. 
  • This includes floating rate bonds, which see their cash flow increase in a rising rate environment while maintaining a relatively low price sensitivity to changes in interest rates. 
  • Given the flattening of the US yield curve this year, short dated credit exposure also looks particularly interesting on a risk-adjusted basis.

Canada Asset Management

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