Unravelling the fixed income conundrum

A trio of factors - low rates, inflation and a gradually recovering economy - create challenges for fixed income investors, and their advisers. Today, interest rates remain near their 60-year lows. Since reaching an all-time high in 1981, ten-year Treasury yields have declined markedly and real yields (yields after inflation) on many fixed income investments remain close to zero. Architas senior investment manager Sheldon MacDonald believes these forces are both increasing risks and creating opportunities in fixed income. "The more positive macroeconomic climate of late has created...