Is it time to rethink bonds?

There are several reasons to think it is time to reconsider the role of fixed income within investor portfolios: 

• Expected 10-year annualized returns to Canadian government bonds and various sleeves of fixed income are now competitive with equities on a risk-adjusted basis.
• With the back-up in yields, sovereign bonds are better positioned to provide investors with protection against future equity market drawdown risk.
• Fixed income covers a wide range of eclectic investment opportunities. Each one offers something different — for instance, an attractive expected yield, an expected illiquidity return premium, or lower duration and credit risk — that can help investors maximize diversification across their investment portfolio.