With bond yields having risen considerably in recent years resulting in disappointing outcomes, investors may be tempted to take additional risk within their bond allocations in pursuit of higher returns. However, doing so can compromise the very characteristics that make bonds valuable within a diversified portfolio.
This issue explores why we believe equities should remain the primary engine of portfolio growth, while high-quality, shorter-dated bonds have an important role to play in providing stability when equity markets are under pressure.
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