Press Releases

BlackRock launches survey on American understanding of fixed income investing

May 12, 2017
By BlackRock

In changing interest rate environment, some critical knowledge gaps about fixed income investing. Confusion abounds over impact of rates and the need to diversify. Call to action for advisors: Urgent opportunity exists as 44% of “knowledgeable” investors say “can’t lose your money” in fixed income.


New York, May 9, 2017 – In a changing interest rate environment, many Americans with investments lack a good understanding of the impact of rates on their portfolios – and even many who claim to be “knowledgeable” about fixed income have fundamental misconceptions about those investments, according to new research from BlackRock (NYSE: BLK).

BlackRock’s market view is that interest rates will rise from historic lows in coming months and years, making an already complex fixed income investing environment even more so.

“Many Americans appear to lack sound basic knowledge about fixed income investing and the role fixed income plays in their portfolio,” said Jeffrey Rosenberg, BlackRock’s Chief Fixed Income Strategist. “They need to be aware of some hidden risks. After years of declining and relatively low interest rates, the prospect of rising rates represents a sea change for investing, yet many Americans don’t understand what this change could mean for investing strategies.

“Rising rates have the potential to touch all segments of the markets, not just fixed income, so it’s key for investors to seek out information so that they can fill any knowledge gaps regarding this critical trend,” said Mr. Rosenberg.

Interest rates and bond prices:  Misunderstanding the link

The BlackRock survey was conducted from April 21 to 23, and covered 417 Americans with $50,000 or more in investible assets.  Nearly one third (31%) of those surveyed – and 44% of those who consider themselves knowledgeable about fixed income – incorrectly believe that when it comes to fixed income investing, “you can’t lose your money.”

Only about three in 10 (31%) correctly noted that if interest rates rise, the effect on the fixed income investments that investors already own is negative (when interest rates rise, bond prices fall).

But more than twice as many (68%) got the link between rates and prices wrong:  35% of those surveyed said there is a positive effect on current fixed income investments when rates rise, while 33% said it makes no difference.  Even investors claiming to be knowledgeable about fixed income investments have knowledge gaps:  37% said that rising rates have a positive effect on current fixed income investments, and 27% said it makes no difference.

“These insights demonstrate the urgent opportunity that exists for financial advisors,” said Hollie Fagan, Head of BlackRock’s dedicated Registered Investment Advisor Business and Retail Investor Platforms. “Clearly, many investors aren’t as informed as they might think regarding fixed income, so advisors can play a critical role in educating clients on the impact of market conditions on fixed income performance as well as the role of fixed income in their clients’ portfolios.”

Most admit they lack knowledge; “advised” more likely to seek help

At the same time, many investors are aware of their knowledge deficit when it comes to the fundamentals of fixed income investment. Sixty percent don‘t consider themselves knowledgeable regarding fixed income, and just 43% said they understand the market and economic forces that drive bond prices.

The survey suggests that an advice relationship does encourage investors to get the help they need.

More than half – 56% -- of those surveyed indicated that they don’t plan to seek guidance on what to do about investing in fixed income over the next year (even though most – 65% – said that, over the next year, interest rates will most likely rise). However, advised investors are considerably more likely than those unadvised (55% vs. 31%) to say they will seek guidance.

Advice also seems to make a difference when it comes to overall confidence levels: Advised Americans are much more likely than unadvised Americans to say that the investments they own today are the right ones for them (88% vs. 70%).

A Strong “Home Bias” in Fixed Income Investment

The BlackRock survey suggests that Americans’ lack of knowledge regarding fixed income encompasses more than just the implications of rising rates. Although investors generally need to consider investing beyond their borders as well as at home in order to achieve proper diversification, those surveyed seem hesitant: 69% (and 78% of those “knowledgeable”) say they would be more comfortable investing in bonds from the U.S. than from foreign countries.

“Over the years, we’ve seen a strong investor bias toward investing in their home country across all asset classes, including fixed income, but what’s worked in the past may not work going forward,” said Mr. Rosenberg. “As the marketplace changes, fixed income investors need to stay flexible and carefully consider the entire range of appropriate investing options, which includes looking for opportunities beyond their borders.”

Investing involves risks, including possible loss of principal.


This communication is for information purposes only and does not constitute a financial promotion, marketing communication or an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer. Accordingly, this material does not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not lawful or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. It is your responsibility to be aware of the applicable laws and regulations of your country of residence. This information is confidential and was prepared solely for the named recipient.  It may not be used or published without the prior consent of BlackRock.

Issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Conduct Authority.  Registered office: 12 Throgmorton Avenue, London, EC2N 2DL.  Tel: 020 7743 3000.  Registered in England No. 2020394.  For your protection telephone calls are usually recorded.  BlackRock is a trading name of BlackRock Investment Management (UK) Limited.

Issued in the Netherlands by the Amsterdam branch office of BlackRock Investment Management (UK) Limited: Amstelplein 1, 1096 HA Amsterdam, Tel: 020 - 549 5200. 

In Australia, issued by BlackRock Investment Management (Australia) Limited ABN 13 006 165 975 AFSL 230 523 (BIMAL). This material is not a securities recommendation or an offer or solicitation with respect to the purchase or sale of any securities in any jurisdiction. It provides general information only and does not take into account your individual objectives, financial situation, needs or circumstances. Before making any investment decision, you should therefore assess whether the material is appropriate for you and obtain financial advice tailored to you having regard to your individual objectives, financial situation, needs and circumstances. This material is not a securities recommendation or an offer or solicitation with respect to the purchase or sale of any securities in any jurisdiction. This material has not been prepared specifically for Australian investors.  It may contain references to dollar amounts which are not Australian and may contain financial information which is not prepared in accordance with Australian law or practices.  This material is not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. BIMAL is a part of the global BlackRock Group which comprises of financial product issuers and investment managers around the world. BIMAL is the issuer of financial products and acts as an investment manager in Australia.

In Hong Kong, this press release is issued by BlackRock Asset Management North Asia Limited. This press release and the BlackRock website mentioned herein have not been reviewed by the Securities and Futures Commission of Hong Kong.

In Singapore, this information is issued by BlackRock (Singapore) Limited (company registration number: 200010143N)

In Korea, this information is issued by BlackRock Investment (Korea) Limited. This material is for distribution to the Qualified Professional Investors (as defined in the Financial Investment Services and Capital Market Act and its sub-regulations) and for information or educational purposes only, and does not constitute investment advice or an offer or solicitation to purchase or sells in any securities or any investment strategies.

In Latin America and Iberia: this material is for educational purposes only and does not constitute investment advice nor an offer or solicitation to sell or a solicitation of an offer to buy any shares of any Fund (nor shall any such shares be offered or sold to any person) in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities law of that jurisdiction. If any funds are mentioned or inferred to in this material, it is possible that some or all of the funds have not been registered with the securities regulator of Argentina, Brazil, Chile, Colombia, Mexico, Panama, Peru, Portugal, Spain, Uruguay or any other securities regulator in any Latin American country and thus might not be publicly offered within any such country. The securities regulators of such countries have not confirmed the accuracy of any information contained herein.

BlackRock México, S.A. de C.V., Asesor en Inversiones Independiente (“BlackRock México”) is a Mexican subsidiary of BlackRock, Inc., registered with the National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores, “CNBV”) as an independent investment advisor (asesor en inversiones independiente) under the registration number 30088-001-(14085)-20/04/2017, thus authorized to render Investment Advisory Services. The registration of BlackRock Mexico in the Investment Advisors Registry (Registro de Asesores en Inversiones) does not imply certification on the compliance by the investment advisors with the applicable laws and regulations or the accuracy or correctness of the information contained herein. Please note that the CNBV exclusively oversees the provision of securities portfolio management services when making investment decisions in the name and on behalf of third parties, as well as services consisting in providing individualized investment advice on Securities, and the analysis and issuance of individualized investment recommendations, thus it is not entitled to supervise or regulate any other services provided by investment advisers.

Investment involves risks. Past performance is not a guide to future performance and should not be the sole factor of consideration when selecting a product. All financial investments involve an element of risk. Therefore, the value of your investment and the income from it will vary and your initial investment amount cannot be guaranteed. Capital at risk. The value of investments and the income from them can fall as well as rise and is not guaranteed.  You may not get back the amount originally invested.  Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase.  Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially.  Levels and basis of taxation may change from time to time.

The views expressed do not constitute investment or any other advice and are subject to change.  They do not necessarily reflect the views of any company in the BlackRock or any part thereof and no assurances are made as to their accuracy.

© 2018 BlackRock, Inc. All Rights reserved. All other trademarks are those of their respective owners. BLACKROCK, BLACKROCK SOLUTIONS, iSHARES, BUILD ON BLACKROCK, SO WHAT DO I DO WITH MY MONEY and the stylized i logo are registered and unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners.

About BlackRock

BlackRock helps investors build better financial futures. As a fiduciary to our clients, we provide the investment and technology solutions they need when planning for their most important goals. As of December 31, 2018, the firm managed approximately $5.98 trillion in assets on behalf of investors worldwide. For additional information on BlackRock, please visit