Focus Sections » OTHER FOCUS SECTIONS » FIXED INCOME PORTFOLIO

Fixed income does not mean low risk. Improperly measuring it may give the wrong impression that a portfolio has a low risk profile, which can lead to unpleasant surprises. Riskdata explains why this is so.

There is essentially a three-stage process to constructing a fixed income portfolio for private clients, involving fund selection, strategic risk control and risk aggregation.

Following the runaway success of equity exchange-traded funds comes the fixed income version. iShares describes how fixed income ETFs work and how to derive the best possible benefits.

Europe’s first equity exchange-traded funds (ETFs) were launched in 2000. They have been received positively by investors, despite the severe bear market which has stacked the odds against them.

Midway between the danger of equities and the safe cocoon of cash is the corporate bond, which is still less risky than stocks but offers better returns than government bonds. JPMorgan is offering a ‘white label’ guaranteed product to distributors who can customise it to match an investor’s specific requirements.

The range of fixed income products on the market means investors’ portfolios can be matched to prevailing conditions, according to Credit Suisse Asset Management.

Stockmarket declines over the past three years have seen a number of investors reconsider their asset allocation mix and risk/return objectives.