A multi-income journey into the emerging high-yield potential
Income investors like us have stayed the course as we ride through the four seasons. Where do we see income opportunities?
Governments across the globe have rolled out massive fiscal and monetary policies to sustain economic activities, intensifying the search for higher yield. How are you navigating the income investing landscape and positioning for the new year? We share some frequently asked questions about income investing.
Q1: Is it too tough to find yield in a low rate environment?
Q2: Are government bonds the go-to income source and diversification has become optional?
Where can we find yield opportunities?2
2. Source: Bloomberg Barclays, J.P. Morgan Asset Management. Representative indices: MSCI World High Dividend Yield (Net) Index (Global equities (high dividend)), MSCI Europe High Dividend Yield (Net) Index (European equities (high dividend)), MSCI Emerging Markets High Dividend Yield (Net) Index (Emerging markets (high dividend)), FTSE EPRA/NAREIT Developed Index (Global REITs), iShares US Preferred Stock ETF Index (Preferred equities), Bloomberg Barclays Global Convertibles Index (Convertible bonds), Bloomberg Barclays US Corporate High Yield 2% Constrained Index (US HY), BofA Merrill Lynch Euro Developed Markets Non-Financial High Yield Constrained Index (European HY), J.P. Morgan EMBI Global Diversified Index (Emerging markets debt), Bloomberg Barclays US IG Credit Index (US IG credit), US 10 Year Treasury Index (US 10 Yr) and German 10 Year Treasury Index (German 10 Yr). Data as of 31.10.2020. Indices do not include fees or operating expenses and are not available for actual investment. Yield is not guaranteed. Positive yield does not imply positive return. Investments involve risks and are not similar or comparable to deposits. Provided to illustrate general market trends not to be construed as research or investment advice.
Q3: Are HY bonds considered high-risk?
Q4: Is the search for income limited to bond coupons and stock dividends?
Conclusion
With an evolving income investing landscape, keeping a sole focus on traditional income sources is no longer optimal. A flexible strategy that strives to go beyond traditional sectors for a broader set of income sources could help capture income opportunities while helping to manage risk1.
Provided for information only based on market conditions as of date of publication, not to be construed as investment recommendation or advice.
Yield is not guaranteed. Positive yield does not imply positive return. Diversification does not guarantee investment return and does not eliminate the risk of loss.
1. For illustrative purposes only based on current market conditions, subject to change from time to time. Not all investments are suitable for all investors. Exact allocation of portfolio depends on each individual’s circumstance and market conditions. The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk.
Investment involves risk. Not all investments are suitable for all investors. Past performance is not a reliable indicator of current or future results. Please refer to the offering document(s) for details, including the risk factors. Investors should consult professional advice before investing. Investments are not similar to or comparable with fixed deposits. The opinions and views expressed here are as of the date of this publication, which are subject to change and are not to be taken as or construed as investment advice. Estimates, assumptions and projections are provided for information only and may or may not come to pass. This document has not been reviewed by the SFC. Issued by JPMorgan Funds (Asia) Limited.