- A flexible bond fund that can provide useful portfolio diversification
- Strengths and weaknesses to consider
Focus on macroeconomic factors
Can invest in riskier bond markets
Fixed income assets have once again proven their worth as portfolio diversifiers, with US government bonds making strong gains amid the initial uncertainty over the outcome of the US election. But the high prices of government bonds and unpredictability of current events mean that betting on this sub-sector of the asset class may not always be a useful diversification strategy. As we have stressed before, flexible bond funds may be a better way to navigate changing market conditions.