As an investor, my client's approach is moderate
and my client uses fixed income to generate income

Change responses

The hidden risk: Yield risk

Too little risk equating to too little income

Average portfolio allocation1

Portfolio allocation: Moderate generate income

Higher yield generally requires higher risk. We see neither in these portfolios, potentially jeopardizing the income goal.2

Based on the portfolios we’ve analyzed, a portfolio like this is typically comprised of 51% equities and 49% bonds, allocated as shown above.3

For illustrative purposes only.


Understanding this risk

  • Investors with a moderate risk tolerance might lean toward cash and core bond strategies for a measure of stability.
  • But that also comes at a cost: opportunity lost. In today’s low-yield world, achieving an income stream requires taking on some risk.

Help manage your hidden risks

Consider adding higher-yielding fixed income options, such as high yield bonds or international debt, to target an income boost.

Let us help you build a better fixed income portfolio for your client.

Contact us

 


 

or use the Target Allocation 50/50 portfolio strategy to help manage your risk with an all-in-one strategy.

50/50 Target Allocation ETF Portfolio Strategy

This investment strategy seeks total return through exposure to a diversified portfolio of fixed income and equity asset classes with a target allocation of 50% equities and 50% fixed income. Target allocations can vary +/-5%. It invests exclusively in iShares Exchange Traded Funds which may pay fees and expenses to BlackRock that are in addition to the fees payable to BlackRock for managing the account. Selection of this strategy indicates a willingness to assume some risk of principal loss. More detailed information on this strategy is available upon request.

Allocations %
U.S. equity 40.0%
U.S. fixed income 39.0%
International equity 15.0%
International fixed income 6.0%

How is technology helping BlackRock manage risk?

Hear from Rick Rieder, BlackRock's Global Chief Investment Officer of Fixed Income, on how the team uses technology to better understand risks in the fixed income markets.

  • View transcript

    Q: How is technology helping BlackRock manage risk?

    The investment world has evolved to where markets have become more efficient in many ways. Social and other media more broadly creates an incredible flow of information. To regularly out-pick the market based on one specific piece of information is impossible. So what should you do? Research, research, research. And analyze. And then allocate your portfolio in a way that ensures you’ve got relative value decisions all around the world, all around the capital stack, and around different asset classes. Then do it over and over again.

    It’s a way of tilting the odds in your favor. By repeating that process a million times over, you’re creating a dynamic where you’re not just diversifying to reduce risk, but you’re diversifying in a way that you’ve got a lot of relative value calls that make sense. When you do it over and over, the odds are working for you on a regular basis.

Well positioned to identify risk

BlackRock is powered by Aladdin®, our powerful risk-analysis and portfolio management technology. Our Aladdin® risk technology platform oversees $17+ trillion in assets under management and is relied upon by 100+ institutions.

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