- With the highest interest rates in 22 years, bonds still have an important role to play in your portfolio, offering potential income, diversification, and capital preservation.
- With higher interest rates, fixed income now offers a generational opportunity for investors.
- 20 years after iShares launched the first bond ETFs, investors are increasingly turning to bond ETFs as a low-cost, efficient way to customize their fixed income portfolios.
After 11 rate hikes, the Fed funds rate is at its highest level in 22 years — investors are able get paid to hold fixed income investments. This higher rate environment creates a generational opportunity for bond investors.
While past returns don’t guarantee future performance, bond ETFs have historically provided ways for investors to diversify portfolios, seek income and potentially preserve capital. Still, investors may need to rethink how they’re using fixed income and the mix of bonds in their portfolios, as detailed below.