Insight
Isolating Income
Currently, pure income is most generous at the front end of the yield curve, incentivizing investors to migrate toward front-end strategies. George Bory and Henri Proutt explain.
Key takeaways
- Of the two drivers of return in fixed income portfolios, income dominates over income reinvestment.
- Current yield levels can set the cornerstone for income investing over the coming years.
- High-income investment strategies should generate highly efficient risk-adjusted returns.
- Tighter monetary policy should keep bond yields elevated and the yield curve inverted for the foreseeable future.
- Short-duration strategies offer generous yields, but intermediate and long durations should not