What's next for fixed income investors?
Fearing that the decades-long run of remarkable total returns coming from fixed income investments may potentially be nearing its end, many advisors have begun to rethink their allocations to the asset class.
Whether you're concerned about the potential for rising interest rates or other headwinds, Delaware Investments has ideas for helping to maintain a well-balanced portfolio.
Explore the issues facing fixed income investors with us, and find out how we can help you prepare for any market environment.
Select one of the options above to learn more.
1 Consider diversifying your fixed income asset base.
2 Think about shortening your duration.
3 Consider additional income-producing assets.
1 Consider municipal debt.
2 Think about diversifying internationally.
1 Opportunities vary by markets.
2 Seek to combine income and growth potential.
Carefully consider the Funds’ investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Funds’ prospectuses and, if available, their summary prospectuses, which may be obtained by visiting our fund literature page or calling 800 523-1918. Investors should read the prospectus and, if available, the summary prospectus carefully before investing.
IMPORTANT RISK CONSIDERATIONS
Investing involves risk, including the possible loss of principal.
Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt. The Fund may also be subject to prepayment risk, the risk that the principal of a fixed income security that is held by the Fund may be prepaid prior to maturity, potentially forcing the Fund to reinvest that money at a lower interest rate.
Securities in the lowest of the rating categories considered to be investment grade (that is, Baa or BBB) have some speculative characteristics.
High yielding, noninvestment grade bonds (junk bonds) involve higher risk than investment grade bonds. The high yield secondary market is particularly susceptible to liquidity problems when institutional investors, such as mutual funds and certain other financial institutions, temporarily stop buying bonds for regulatory, financial, or other reasons. In addition, a less liquid secondary market makes it more difficult for the Fund to obtain precise valuations of the high yield securities in its portfolio.
The Funds may invest in derivatives, which may involve additional expenses and are subject to risk, including the risk that an underlying security or securities index moves in the opposite direction from what the portfolio manager anticipated. A derivative transaction depends upon the counterparties’ ability to fulfill their contractual obligations.
Diversification may not protect against market risk.
The Funds may invest in bank loans and other direct indebtedness, and therefore are subject to the risk that they will not receive payment of principal, interest, and other amounts due in connection with these investments, which primarily depend on the financial condition of the borrower and the lending institution.
Interest payments on inflation-indexed debt securities will vary as the principal and/or interest is adjusted for inflation.
If and when the Fund invests in forward foreign currency contracts or uses other investments to hedge against currency risks, the Fund will be subject to special risks, including counterparty risk.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of an investment at $1.00 per share, it is possible to lose money by investing in them.
International investments entail risks not ordinarily associated with U.S. investments including fluctuation in currency values, differences in accounting principles, or economic or political instability in other nations. Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility and lower trading volume. Diversification may not protect against market risk.