US Treasuries are dominating the headlines for all the wrong reasons. After the US Treasury announced that it will more than double the size of its long-bond buybacks, yields rose rather than fell. In other words, the world’s largest borrower told the market what it wanted, and the market said no.
Many Australian investors continue to focus on income-generating investments. However, with ongoing market volatility, it’s worth thinking carefully about how income-generating investments are allocated within a portfolio.
Fixed income is often described as the defensive part of an investment portfolio. For many investors, it is expected to provide regular income, reduce reliance on share market returns and help smooth the overall investment journey. That description is broadly right. But it can also create an unrealistic expectation that fixed income investing is simple, safe and always stable.
US Treasuries are dominating the headlines for all the wrong reasons. After the US Treasury announced that it will more than double the size of its long-bond buybacks, yields rose rather than fell. In other words, the world’s largest borrower told the market what it wanted, and the market said no.
Many Australian investors continue to focus on income-generating investments. However, with ongoing market volatility, it’s worth thinking carefully about how income-generating investments are allocated within a portfolio.
Fixed income is often described as the defensive part of an investment portfolio. For many investors, it is expected to provide regular income, reduce reliance on share market returns and help smooth the overall investment journey. That description is broadly right. But it can also create an unrealistic expectation that fixed income investing is simple, safe and always stable.
Choosing what to invest in can be as difficult as maintaining a good diet.
We all know we should eat healthily, yet how exciting would life be if we were always munching down on a quinoa and kale salad, leaving no room for an expensive steak, or a bag of your favourite lollies? Likewise, reliable, lower-risk bonds generally won't keep you up at night with wild price swings, yet do they offer the necessary returns available in riskier and perhaps more exciting asset classes?
Among the attractions of an investment in an unlisted private credit fund is avoiding the volatility associated with the public markets.
There is a downside to not marking-to-market, as it risks a fund holding assets at a Book Value well in excess of Fair Value.
Wholesale private credit products offer investors access to unique and attractive investment opportunities not usually available to the retail investor market.
Because wholesale products don’t provide investors with the same consumer protection as retail funds, it’s important to review the offer document in full and seek advice if required.