{"id":4253,"date":"2021-09-06T08:14:00","date_gmt":"2021-09-06T00:14:00","guid":{"rendered":"https:\/\/www.syfe.com\/magazine\/?post_type=guide_article&p=4253"},"modified":"2021-09-07T15:23:23","modified_gmt":"2021-09-07T07:23:23","slug":"how-to-invest-for-income-with-a-bond-portfolio","status":"publish","type":"guide_article","link":"https:\/\/www.syfe.com\/magazine\/guide_article\/how-to-invest-for-income-with-a-bond-portfolio\/","title":{"rendered":"How To Invest For Income With A Bond Portfolio"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

Imagine being able to earn income without spending much time or effort. That\u2019s passive income for you – your money making more money for you 24\/7, even when you sleep!<\/p>\n\n\n\n

Anyone can invest for income. You can build a passive income portfolio using dividend stocks, bonds and real estate investment trusts (REITs). What to invest in ultimately depends on the degree of risk you\u2019re comfortable with, and the income you require. <\/p>\n\n\n\n

A closer look at fixed income \/ bonds<\/strong><\/h2>\n\n\n\n

Many investors are familiar with dividend stocks and REITs. But not many realise that bonds can provide attractive yields too. It all depends on the type of bonds used. Broadly speaking, bonds can be categorised as government or corporate bonds, and are rated on their credit risks.<\/p>\n\n\n\n

Investment grade bonds (rated \u2018BBB’ or higher) typically have a low risk of default. High-yield bonds (rated below \u2018BBB\u2019) have a higher default risk compared to investment grade bonds, and so pay a higher yield to compensate investors. <\/p>\n\n\n\n

Geography matters too. Emerging market bonds typically offer more attractive yields compared to bonds from developed markets. Yet, they\u2019ve historically had default rates similar to developed markets corporate bonds.<\/p>\n\n\n\n

\"\"\/
Source: PIMCO, Moody\u2019s, as of May 2020<\/em><\/figcaption><\/figure>\n\n\n\n

Syfe Select Global Income: A high yield portfolio <\/strong><\/h2>\n\n\n\n

As you can guess, it\u2019s possible to build an attractive income portfolio using a mix of different bond types. For instance, the Syfe Select Global Income portfolio<\/a> has exposure to both investment grade and high yield corporate and government bonds. <\/p>\n\n\n\n

The allocation to government bonds (32%) helps provide stability during times of volatility, while corporate bonds (68%) help generate better returns. Additionally, the portfolio\u2019s significant allocation (55.2%) to emerging market bonds helps boost portfolio yield and improve risk-adjusted returns.<\/p>\n\n\n\n

The Syfe Select Global Income portfolio targets a gross dividend yield of 4.25% per annum. These include:<\/p>\n\n\n\n