What role should bonds play in portfolios today?
With growing concerns about debt sustainability in the Western markets, we think it's time for investors in fixed income to really rethink the role of bonds.
We have to go back to the old-fashioned reason for owning bonds, which is thinking about the income that they provide. Yet at the same time, the fear of disruption, the fear of instability in markets means that investors are concerned about how will they provide resilience in their portfolios.
If the role of bonds will not be as effective as a hedge, what are the other assets that investors can consider? Thinking about assets in private markets, thinking about commodities, particularly precious metals, may help investors with greater resilience in the changing role of bonds.
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