A growing economy increases the chance of rising interest rates.
How Can I still generate income ?

Indeed, with interest rates at historically low levels and the Federal Reserve normalising its monetary policy, we might be on the verge of a period of rising interest rates.  This could be bad news for bond investors, since bonds lose value as interest rates rise. Fortunately, you can protect your investment portfolio from rising interest rates and still generate income by investing in specific investment solutions.

A growing economy

Invest in total return strategies

Bond investors are challenged by the current market environment and should search for yield, while controlling their interest-rate risks. Total return strategies are created to generate positive returns throughout all cycles, thanks to a dynamic duration allocation and a large diversification from AAA bonds to high-yield and convertible bonds, and even emerging market bonds.

Invest in alternative asset classes with a lower correlation

You should also consider increasing your exposure to absolute return strategies. These strategies generally have a higher expected return in this market context, with lower volatility. Also, they have the lowest correlation to both European and US government bonds.

Invest in an all-in-one multi-asset strategy

Of course, it is a challenge for individual investors to manage portfolio duration, seek the appropriate higher-yielding bonds and invest in other asset classes, including equities. A multi-asset strategy is a flexible portfolio with a target return and a regular income that can invest in all available asset classes, based on the outlook for the financial market risks and opportunities.