Income investing can be a critical tool to help investors meet different goals at different stages of their lives. Today, income investing is vital amid ageing populations, an ongoing search for yield and ever-changing market conditions.
Whether you’re retired and want to generate income, an investor who wants to manage the impact of market volatility, or simply looking for an attractive alternative to low returns on cash savings and government bonds, income investing can be for you^.
Retirement Needs
Asia’s elderly population is projected to more than double by 2050 driven by declining fertility and increased longevity1. Those living longer will need to make their savings cover extended retirement periods.
Interest Rates
Rates are moving higher but are still very low by historical standards, meaning people will continue to look for solutions that can grow their savings.
Changing Markets
In the last decade we’ve had a global financial crisis, large swings in commodity prices and rising geopolitical uncertainty, meaning people will continue to look for solutions that can help cushion market volatility.
^Investors should seek professional advice regarding the suitability of any investment products.
1United Nations, World Population Ageing (2015) - elderly defined as 60 years and over.
Source: J.P. Morgan Asset Management, as of June 30, 2017.
MANY SOURCES OF INCOME
Income sources can be found across emerging and developed markets. Income also comes in different forms, such as stock dividends and bond coupons. These can be captured on their own or through a multi-asset approach, which can combine different income streams within a flexible and diversified portfolio.
UNDERSTANDING RISKS AND RETURNS
Investors need to consider both risks and returns when selecting their investment strategy. In general, equity investments are considered to have higher risk with greater potential for capital gains than bonds. The risk/return profile will also vary according to the asset type, with emerging market equities and high yield bonds generally considered to have a higher risk/return profile than developed market equities and investment grade credits.
A multi-asset portfolio usually sits in the middle of the spectrum, blending a diverse mix of asset classes in order to generate attractive returns along with acceptable levels of risk. Choosing one’s investment strategy is a bit like climbing a mountain or surfing - the route one takes will depend on the risks one is prepared to take and the prevailing weather conditions.
INSIGHTS ON REGIONAL MARKETS WITH INCOME POTENTIAL
PRODUCT OFFERINGS FOR INCOME INVESTORS
Important information 1. Investment involves risk. Please refer to the offering document(s) for details, including the risk factors before investing. 2. Investors may be subject to substantial losses. 3. Investors should not solely rely on this document to make any investment decision. |
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