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Think Differently About Income

As we enter a new market regime, investors are faced with unprecedented challenges. Investors and asset managers alike need to think differently about how they are investing for income.
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Three investor challenges

We are entering a new world of heighted market uncertainty. Investors face new challenges in their search for income
Low-cost-tag
Higher inflation can eat away at your savings
volatile volcano
Elevated uncertainty is leading to more volatility
momentum
Markets are constantly changing
What worked in the past, may not work in the future.
10.3%
Inflation in the OECD rises to 10.3% in June 2022 as food and energy prices continue to pick up.1

Higher inflation can eat away at your savings

Increase30%
CBOE VIX Volatility Index’s average closing price in 2022 so far is 25.7, up 30% from 2021 average.2

Elevated uncertainty is leading to more volatility. This implies that market views may have to change more quickly and get more granular.

Decrease14.9%
Year-to-date return of traditional 60/40 portfolio3

Relying on historical relationships may prove challenging in the future as a traditional 60/40 portfolio of stocks and bonds has come under pressure. What worked in the past, may not work in the future.

How do we “Think Differently About Income”

Investors and asset managers alike need to “think differently” about how they are getting income from their investments.
Ratio Percentage
Focus on generating higher income to keep up with inflation
A lot of traditional bond markets cannot offer yields above inflation level. We need to think differently to realize positive real yields – higher income strategies may help.
low votality
Use volatility to your advantage
Today’s investing landscape comes with more uncertainty. But volatility isn’t always negative. We can take advantage of volatility to enhance income and return potential.
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Stay nimble and be diversified
Many of this year’s winners are last year’s laggards. Investors can benefit from market gyrations delivering new opportunities by staying nimble and be diversified.