1 Source: DataStream, BlackRock. The yield on cash is represented by 3 month LIBOR (EUR), government bonds by 10-year German bunds, global equities by MSCI AC World Index, European equities by MSCI Europe Index, global high yield dividends by MSCI World High Dividend Index and corporate bonds by Euro Aggregate BAA. European high dividend equities by MSCI Europe High Dividend Index. Yield shown as at 31.08.2012.
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All financial investments involve an element of risk. The value of your investment and the income from it will vary and your initial investment amount cannot be guaranteed. Past performance is not a guide to future performance and should not be the sole factor of consideration when selecting a product. Overseas investments may involve risk of capital loss from unfavourable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume.
Investments in fixed interest securities such as corporate or government bonds pay a fixed or variable rate of interest and behave similarly to a loan. These securities are therefore exposed to changes in interest rates which will affect the value of any securities held. Companies which issue higher yield bonds typically have an increased risk of defaulting on repayments. In the event of default, the value of your investment may reduce. Economic conditions and interest rate levels may also impact significantly the values of high yield bonds. Under certain market conditions, liquidity in bond markets may fall significantly without warning. Therefore it may not be possible to sell a security at the last quoted price or at a value considered to be fair. In extreme market conditions, it may be difficult to realise your investments.
Diversification and asset allocation may not protect you fully against market risk.
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