2. Forecasts, projections and other forward looking statements are based upon current beliefs and expectations. They are for illustrative purposes only and serve as an indication of what may occur. Given the inherent uncertainties and risks associated with forecast, projections or other forward statements, actual events, results or performance may differ materially from those reflected or contemplated. Source: J.P. Morgan Asset Management; (Left) FactSet, Tullett Prebon; (Right) Bloomberg Finance L.P. *Data begins, and averages calculated from, 01.01.1970 for US Treasuries, 02.10.1972 for German Bunds and 03.02.1986 for Japanese Government Bonds. Past performance is not a reliable indicator of current and future results. Positive yield does not imply positive return. Data reflect most recently available as of 30.09.2021.
- Fixed income covers a wide range of sectors. In addition to traditional fixed income such as government bonds and investment-grade corporate bonds, there are extended sectors such as high-yield corporate bonds.
- As different bonds react differently to market changes, the key to a diversified fixed income portfolio is to include assets which have low or even negative correlations1.
- Employing a flexible approach can help identify high-conviction investing ideas. As part of an overall portfolio and based on investors’ objectives and risk appetite, fixed income assets with high-yielding potential like HY bonds continue to be a relatively attractive source of income, as illustrated in the chart3 below. For example, European HY bonds can present potential diversification benefits as they are generally of higher quality and have shorter duration.
Global fixed income: yields and duration3
3. Provided to illustrate macro trends, not to be construed as research or investment advice. Investments involve risks and are not similar or comparable to deposits. Not all investments are suitable for all investors. Source: Barclays, Bloomberg Finance L.P., FactSet, ICE BofA Merrill Lynch, J.P. Morgan Economic Research, J.P. Morgan Asset Management. Based on Bloomberg Barclays US Aggregate Credit – Corporate Investment Grade Index (US IG), Bloomberg Barclays Euro Aggregate Credit – Corporate (Europe IG), J.P. Morgan Asia Credit Investment Grade Index (Asia IG), Bloomberg Barclays Global Aggregate – Corporate (Global IG), Bloomberg Barclays US Aggregate Credit – Corporate High Yield Index (US HY), Bloomberg Barclays US Aggregate Securitized – Asset Backed Securities (US ABS), Bloomberg Barclays Pan European High Yield (Europe HY), J.P. Morgan Asia Credit High Yield Index (Asia HY), ICE BofA Global High Yield (Global HY), J.P. Morgan GBI-EM (Local EMD), J.P. Morgan EMBI Global (USD EMD), J.P. Morgan Asia Credit Index (JACI) (USD Asia Credit), J.P. Morgan Asia Credit China Index (USD China Offshore Credit). Duration is a measure of the sensitivity of the price (the value of the principal) of a fixed income investment to a change in interest rates and is expressed as number of years. Rising interest rates mean falling bond prices, while declining interest rates mean rising bond prices. Yields are not guaranteed, positive yield does not imply positive return. Past performance is not a reliable indicator of current and future results. Data reflect most recently available as of 30.09.2021.