Rising Rates: Short-Term Pain for Long-Term Gain?
Rising yields impact fixed-income portfolios in several ways.
Investors have likely noticed the improved opportunity set in fixed income due to higher yields. And yet some investors may be hesitant to take advantage of higher yields because of concerns about future increases in yields. Some may even be considering reducing their bond exposure after this year’s negative returns for fixed income.
The good news? If yields do keep rising, investors seeking higher expected returns may still be better off maintaining the duration of their fixed income allocation.
We've provided the PDF below from DFA to discuss how rising yields can impact fixed-income portfolios in several ways.
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