Tactical High Income: A Solution for Rising Treasury Yields
Special Report

Tactical High Income

February 2, 2022

Over the last 30 years, it’s paid to invest in investment grade bonds. Falling yields have meant rising prices: From a high of 8% in 1991, the 10-year US Treasury yield declined to a low of 0.5% in July of 2020. Investing in bonds was like minting money.

But the good times couldn’t last forever. It turns out that bond yields can still rise and when they do investors in Treasury and investment grade bonds may feel some pain. In the first quarter of 2021, 10-year Treasury yields jumped 89%, their largest percentage increase in 30 years. And with more rate hikes on the horizon in 2022, yields are on the rise again.

At Adviser Capital, we view high-yield bonds as an alternative to investment grade bonds when Treasury yields are rising, and our AIQ Tactical High Income portfolio seeks to allow investors to benefit strategically from those higher yields.

This exclusive report offers an informative look at our AIQ Tactical Income strategy, including:

  • The pros and cons of investing in high-yield bonds
  • Differences and similarities between high-yield bonds and Treasury bonds
  • What you can expect from our Tactical High Income strategy

Historically, high-yield bonds have performed well, relative to investment grade bonds, when Treasury yields rise. The table below shows every instance over the last 30 years when 10-year Treasury yields have increased more than 10% in a quarter.

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