Investments  

Guide to managing bonds in an income portfolio

  • Explain the sensitivity of different parts of the bond market to interest rates
  • Describe the supply and demand dynamics of bond markets
  • Explain the different parts of the corporate bond market
CPD
Approx.60min
Guide to managing bonds in an income portfolio
(Anna H/Pexels) 

Introduction

For most of the decade after the financial crisis, bonds yielded little and their traditional role as a source of income in a balanced multi-asset portfolio was dented.

Rising interest rates across the globe have pushed bond yields higher over the past year, and restarted the conversation around the potential for such assets to provide an ample yield. 

This guide, which comes with 60 minutes of CPD, will explore the conditions of different parts of the government and corporate bond markets, and the balances between risk and reward involved with fixed income markets right now. 

david.thorpe@ft.com

In this guide

CPD
Approx.60min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. In section one, what challenge does Matellán say bond investors are grappling with right now?

  2. In section one, why have long-duration bonds recently sold off?

  3. In section 2, to what does Kloss attribute the recent volatility in the bond markets?

  4. In section 2, what does Niven say could happen to government bonds next year?

  5. In section 3, what does Chapman say is an attractive option for investors seeking to reduce interest rate risk?

  6. In section 4, why does Kloss like investment-grade bonds right now?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • Explain the sensitivity of different parts of the bond market to interest rates
  • Describe the supply and demand dynamics of bond markets
  • Explain the different parts of the corporate bond market

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