Financial Literacy

The primary risk in a fixed income portfolio is credit risk – the risk that a bond issuer will fail to make payments (or “default”) on its debt.

Fixed income managers always want to have the flexibility to look for the best value across their investment universe, and in our view they therefore need the capacity to buy bonds in different currencies.

Inflation is widely understood to be bad for bonds. Fundamentally, this is because inflation erodes the value of the coupon and principal payments that fixed rate bondholders receive in the future.

The goal of income investing is to ensure that your portfolio generates a steady source of revenue regardless of market conditions.