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The risks of investment in fixed income
The world has changed for fixed income investors. The four primary sectors in the fixed income market have converged into two. Interest rate risk in the US is at its highest level in decades. Sector risk/return characteristics have been significantly alteredperhaps permanently. These factors, along with the likelihood of higher interest rates, are coming together to create an environment of heightened risk for fixed income investors.
Understanding interest rate risk
The US Federal Reserve has maintained a zero-rate interest rate policy since December 2008, with expectations of a secular upward trend in interest rates many investors are...
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