Generating Income

Portfolios designed for income-seeking investors looking to mitigate inflation and downside risk

Bond yields have risen dramatically since the beginning of 2022. That might look like great news for income investors but the return of high inflation and the potential impacts of recession make life more challenging.

Investors need to achieve a level of income that’s high enough to help offset elevated inflation and able to withstand ongoing uncertainties. We believe risk-aware outcome-oriented investing strategies can come into their own.

Euro-Area Government Bond Yields Have Risen Across the Curve
Soaring Inflation Spelt the End of Negative Rates

For illustrative purposes only
Source: Bloomberg
As of: 31 December 2023

The Opportunity

For fixed-income investors, we believe risk controls and dynamic management will be highly important in the current era. Global multi-sector approaches to investing are also well suited to a quickly evolving landscape, as investors can closely monitor conditions and valuations and prepare to shift the portfolio mix as conditions warrant. 

High-yield bonds can offer attractive yields—and feature relatively low exposure to interest-rate risk—but they are also generally the most exposed to setbacks in the economy and in equity markets. To further reduce risk, we think it’s worth considering portfolios that focus on high-yield bonds with a short time to maturity. 

There’s a strong case for adopting a balanced approach. Among the most effective active fixed-income strategies are those that pair government bonds and other interest-rate-sensitive assets with high-yielding growth-oriented credit assets in a single, dynamically managed portfolio. 

For investors looking for risk-controlled portfolios with longer-term capital growth opportunities, multi-asset income solutions that can access equity and alternative investments are also worth a look.

Investment Solutions

At AB, we offer a range of fixed-income and multi-asset funds based on a combination of in-depth fundamental and quantitative research to help investors find the income and growth they need, consistent with the risks they can afford to take.

AB All Market Income Portfolio

The value of an investment can go down as well as up and investors may not get back the full amount they invested. Capital is at risk.

The Portfolio/Fund is meant as a vehicle for diversification and does not represent a complete investment programme. Prospective investors should read the Prospectus, which includes Sustainability-Related Disclosures, and discuss risks and the Portfolio's/Fund’s fees and charges with their financial advisor to determine if the investment is appropriate for them.
The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams and are subject to revision over time. 
AB offers open-ended Luxembourg-based funds under AB FCP I, a mutual investment fund (fonds commun de placement) organized under the laws of the Grand Duchy of Luxembourg and AB SICAV I, an open-ended investment company with variable capital (société d’investissement à capital variable) incorporated under the laws of the Grand Duchy of Luxembourg.
Not all of the strategies and products we offer are available and/or registered for distribution in all jurisdictions. The sale of funds may be restricted or subject to adverse tax consequences in certain jurisdictions.    

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Concrete solutions for a challenging landscape

Investors face many strategic questions in today’s challenging landscape.
Find out more about AB’s a range of solutions that aim to meet a variety of investment needs.