Demand for bank loans is growing as investors look for hedges against inflation and rising interest rates. The asset’s steady performance in the last two decades also helps to increase its appeal.
Thanks to the current rise in yields, the key return driver of the bond market is set to change but its bull run will very likely continue.
Fixed income offers wide-ranging diversification benefits ranging from generating total return – comprised of income and capital appreciation – to managing downside risks.
Most current valuations have already accounted for the uncertainty regarding the length of the recovery.