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Bond Market Dilemma: Lowering Duration Without Sacrificing Yield

Dec. 01, 2021 7:30 AM ET


  • Today, investors need to consider an approach that allows them to remain invested in key sectors that can generate income while also navigating the uncertainty of interest rate moves and market volatility.
  • Investors could benefit from owning lower-duration, diversified fixed-income solutions that invest in higher income-producing sectors, such as high-quality high yield, emerging market debt and broad use of structured assets.
  • Together with investment-grade corporate bonds, these sectors typically experience low correlation and can provide attractive income and capital appreciation, while keeping overall duration reasonably low.
BONDS word made with building blocks on the black keyboard. A row of wooden cubes with a word written in black font is located on a black keyboard.

Maksim Labkouski/iStock via Getty Images

By Edward Kerschner, Chief Portfolio Strategist; Ronald Stahl, CFA, Senior Portfolio Manager, Head of Short Duration and Stable Value; Neeraj Agarwal, Investment Research Analyst

Fixed-income investors limit their opportunity set when they focus on benchmark-tracking or benchmark-hugging strategies. But many investors


This article was written by

Columbia Threadneedle Investments is a leading global asset management group that provides a broad range of actively managed investment strategies and solutions for individual, institutional and corporate clients around the world. Columbia Threadneedle Investments is the global asset management group of Ameriprise Financial, Inc. (NYSE: AMP). For more information please visit columbiathreadneedleus.com.

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