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The best flexible bond funds for income and mitigating market crashes

Strategic and Global Bond funds can mitigate downside and provide an attractive income
The best flexible bond funds for income and mitigating market crashes
  • Flexible bond funds are a good way to access this asset but the options differ massively
  • The key differences and how to find a fund to meet your needs

Bonds have proved once again proved their worth in 2020. Government bonds were one of the few assets to protect investors during the sharp sell-off in February and March, and have continued to hold up well during recent bouts of equity volatility. Riskier bonds such as investment grade credit, and high yield and emerging market debt have looked more attractive in terms of yield and price in the wake of the March sell-off.

But fixed income comes with several drawbacks. Government bonds continue to look extremely expensive, leaving them with unattractive yields and highly vulnerable to a sell-off. Higher income subsectors such as high yield, meanwhile, can be highly correlated to equity markets and carry hefty risks. And understanding the prospects for either of these areas can be a difficult task.

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