What’s changed in bonds and why it matters for you

If you're looking for better rates of return on deposits than you’d get in an ordinary bank account, cash funds may be an option to consider. They often invest in very short-term bonds known as ‘money market instruments’, which are essentially banks lending money to each other.

From funds that invest in precious metals such as gold and silver, to energy resources such as oil and natural gas, to agricultural goods such as wheat, commodity funds offer several potential benefits to investors, including portfolio diversification and a hedge against inflation.

When you invest in stocks (also called equities), you buy a share in a company and become a shareholder. Equities are typically more appropriate for long-term investing – for those who can ride out the highs and lows of the market in search of higher rewards.

Bonds, also known as fixed income securities, are issued by companies and governments as a way of raising money. They’re basically an ‘I.O.U’ – designed to provide a regular stream of income (which is normally a fixed amount) over a specified period of time.

A multi-asset strategy combines different types of assets – stocks, bonds, real estate, or cash for example – to create a more nimble and broadly diversified portfolio. Fund managers will balance asset classes to achieve particular investment objectives.

While traditional assets like stocks and bonds are traded on the public markets, alternative investment strategies such as real estate are less sensitive to the movements of global markets. More and more investors are shifting to alternatives to help them achieve their goals.