To make it easier for you to prepare meeting materials, we’ve developed these slides on how government bonds provide safety. The presentation is in a Word file to make it simpler to customize the content to your client’s needs.
Enjoy, and we hope this offering helps enhance your client meetings.
SLIDE 1 Interest rates are really low, so Canadian and U.S. government bonds have lost their lustre among investors looking for higher yields.
SLIDE 2 But these bonds should still have a place in your portfolio because they offer protection. [related-posts] SLIDE 3 This is especially true when there’s a “flight to quality.”
That’s when the market as a whole is concerned a major downturn.
When that happens, investors look for safer assets.
SLIDE 4 When you have a flight to quality, U.S. and Canadian government bonds perform very well.
SLIDE 5 But not all government bonds have this safe-haven characteristic.
SLIDE 6 European and emerging market bonds have higher yields, but at the price of greater risk.
SLIDE 7 Your main options with fixed income:
• If you want to stay in North America, think government bonds for safety; corporates and preferred shares for yield.
• To diversify your higher-yielding options, look to European and emerging market government bonds.
SLIDE 8 To access European and emerging market bonds, you’ll need to buy a mutual fund or ETF.
Purchasing these bonds individually is a highly complex process suitable only for large institutional investors. (And even they often use funds.)
