Do rising rates hit returns on income investments?
Analysis confirms that income levels are generally less sensitive to changes in interest rates than overall returns.
Add BT as a preferred sourceDeeperDive is a beta AI feature. Refer to full articles for the facts.
OUR research, which looks at episodes of rising rates since 1970, suggests income-producing assets don't perform as investors might expect.
Many will remember to their cost the infamous "taper tantrum" in June 2013. It was the moment Ben Bernanke, then chairman of the US Federal Reserve, indicated that the quantitative easing (QE) would be scaled back, or tapered.
The QE programme had fed money into the financial system to stimulate the economy following the financial crisis of 2008. It had helped keep the yields on government bonds at exceptional lows.
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