Using Passive Funds to Invest in Bonds

Looking for a low-cost option to add fixed income exposure to your portfolio? Morningstar analysts pick three passive funds for your perusal

Karen Kwok 10 February, 2016 | 4:33PM
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Is your portfolio earning you the best possible rate of income? Are you prepared for this year's interest rate rise? We show you how to maximise yield and where to find dividend payers in our Guide to Income Investing.

Bond markets are dividing, as central banks across the globe adopt wildly differing policies. While the Federal Reserve raised rates for the first time in nine years in December, other major economies are choosing to cut rates. Japan is now in negative interest rate territory, after the yield on the 10-year Japanese government bond went negative on Monday for the first time ever after introducing the policy last week. The European Central Bank is expected to follow suit.

In the UK, government-issued bonds yields, also called gilts, fell following stock market volatility. On top of this divergence, a scandal emerged in Europe this week of a possible manipulation of the $1.5 trillion government bond market involving financial traders.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
iShares Core £ Corp Bond ETF GBP Dist154.26 GBP0.78Rating
iShares Core UK Gilts ETF GBP Dist14.49 GBP1.72Rating
Vanguard Glb Bd Idx £ H Acc164.66 GBP0.65Rating

About Author

Karen Kwok

Karen Kwok  is a Reporter for