In the wake of the Global Financial Crisis, interest rates dropped to historic lows as central banks rolled out quantitative easing programs. This created an investment landscape where investors could benefit from a ‘one way trade’ in fixed income, and rely on income from passive investments with little risk of capital loss. We’re now seeing a shift in this landscape, and Chris Rands of Nikko Asset Management discusses why the ‘free ride’ may be over for investors.

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The 5 biggest myths in fixed income investing

Darren Langer of Nikko Asset Management debunks the top 5 myths in fixed income:

  • It’s better to follow a passive index
  • If some credit is good in a portfolio, adding more is better
  • Floating rate funds are better than fixed rate funds
  • Rising rates are always bad for fixed income investors
  • After fees, active fixed income managers offer no excess return

Whitepaper

This paper dispels the myths around using active fixed income managers and builds the case for why active managers make a difference.

"Busting the myths on active fixed income managers"

This material was prepared by Nikko AM Limited ABN 99 003 376 252 AFSL No: 237563 (Nikko AM Australia). Nikko AM Australia is part of the Nikko AM Group. The information contained in this material is of a general nature only and does not constitute personal advice, nor does it constitute an offer of any financial product. It is for the use of researchers, licensed financial advisers and their authorised representatives, and does not take into account the objectives, financial situation or needs of any individual. The information in this material has been prepared from what is considered to be reliable information, but the accuracy and integrity of the information is not guaranteed. Figures, opinions and other data, including statistics, in this material are current as at the date of publication, unless stated otherwise. The figures contained in this material include either past or backdated data, and make no promise of future investment returns. Past performance is not an indicator of future performance. Any economic or market forecasts are not guaranteed. Any references to particular securities or sectors are for illustrative purposes only and are as at the date of publication of this material. This is not a recommendation in relation to any named securities or sectors and no warranty or guarantee is provided.