When we talk to investors, there seems to be three common concerns around fixed income. Aren’t yields too low? Won’t there be capital losses if rates rise? Is it game over to reach for yield?
If your approach to fixed income is to just buy bonds and harvest income, then I can understand why you’d be concerned about these things.
But there’s a lot more to fixed income than just buying bonds. There’s a variety of instruments and strategies that aren’t vulnerable to these at all. In our Ardea Real Outcome Fund, we use these tools to give you attractive, low volatility returns, irrespective of whether yields or interest rates are high or low.
Since inception six years ago, our defensive strategy has consistently delivered 3.5% p.a. (net of fees).
In the Fund in Focus below, I share with you how the fund can complement your portfolio, why we believe standalone bonds are no longer inherently defensive, and the three steps we use to select our investments.