From Morningstar: 2024-05-24 10:36:00

Morningstar Investment Management’s outlook includes calls to say yes to bonds for income investors. Nicolo Bragazza explains that with rising yields, bonds offer attractive yields and can diversify portfolios. Government bonds provide income predictability and lower default risk, but higher yields come with higher risks, especially during tight credit spreads. The impact of an ECB interest rate cut on treasury bonds depends on market expectations. Lower yields generally boost bond prices, but the effect may be dampened if the cut is already priced in. Income investors should consider government bonds for low risk, corporate bonds and high yield bonds for extra yield, and EM bonds for sophisticated portfolios. Risk tolerance is crucial when selecting fixed-income investments.



Read more at Morningstar: Are Bonds Good for Income Investors?