Worried about your income portfolio?

We understand that this is a stressful time for income investors. Interest rates globally have risen because of growing debt, a heated US economy and inflation worries.

Given that bond prices move inversely to interest rates, and Income+ consists of bonds, performance has inevitably been impacted.

But the same headwinds that have hurt performance could soon turn in your favour.

What happened: inside Income+

September was particularly tough for Income+ as the Fed hiked for the first time in three years, and investors’ concerns heightened across the developed world, from the US to Europe.

But the steady payouts have cushioned much of the shock year-to-date, keeping Preserve close to flat and Enhance positive.

INCOME+ RETURNS SEPTEMBER AND YEAR TO DATE, 2026 Preserve Enhance US 10-year yield SEPTEMBER +0.54% 4.75% → 5.29% NAV change −3.80% −3.77% Dividend payout +0.48% +0.52% Total −3.32% −3.25% JAN–SEP +1.11% 4.18% → 5.29% NAV change −5.09% −3.82% Dividend payout +4.11% +4.33% Total −0.98% +0.51% Total = NAV change plus monthly dividend payouts (not reinvested), SGD. Data to 30 Sep 2026. US 10-year yield: US Treasury closing yields at start and end of each period. Source: Syfe, Bloomberg, FRED. Past performance is not indicative of future returns.

Will things get worse?

The last two times 10-year yield sat near 5% (2002, 2023), it slid about one percentage point lower within a year. History doesn’t repeat. But it shows how quickly the tide can turn.

Given that the energy shock is a one-off, inflation could ease into next year. In fact, markets’ inflation expectations have barely budged YTD. Yields could stabilise around 5.5% as Fed tightening begins to cool the economy.

10-YEAR US TREASURY YIELD THE YEAR AFTER IT LAST HIT ~5% 2002 2023 Peak yield 5.44% 1 Apr 2002 4.98% 19 Oct 2023 12 months later 3.84% 1 Apr 2003 4.08% 18 Oct 2024 Daily closing yields. Source: Federal Reserve Board via FRED (DGS10). Past performance is not indicative of future returns.

Should I sell?

The lesson: Selling prematurely can turn paper losses into actual ones, unnecessarily. At 5%, income can help soften further blows.

Historically, high starting yields have pointed to strong future returns. When interest rates turn, capital gains can add to the payouts – making now an opportunity to top up, not retreat.

10-YEAR US TREASURY SCENARIOS 12 MONTHS FROM NOW IF YIELDS… TOTAL RETURN Rise 1 pt −1.6% Rise 0.5 pt +1.7% Stay flat +5.2% Fall 0.5 pt +8.9% Fall 1 pt +12.7% Total return = interest + price change on a 10-year US Treasury. Source: Bloomberg, as of 1 Oct 2026. For illustration only.

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