Harvest the fruits of diversified income | Amundi HK Retail

Harvest the fruits of diversified income

Explore attractive income opportunities across different asset classes. With a strategic approach tailored to investment needs, investors can harness the potential of both income and long-term growth.

A woman eating an apple at the base of a fruit tree.

The landscape for income investing has shifted significantly in recent years. After over a decade of yield scarcity, attractive income opportunities are now available across various asset classes. As central banks have moved away from ultra-loose monetary policies, fixed income instruments have started to offer competitive yields. Simultaneously, dividend-paying equities are providing robust income streams, while real assets could represent appealing options for income-focused investors seeking to diversify their portfolios and enhance returns.

Investors may pursue various objectives, yet it is essential for them to strategically select and manage their income-generating assets to build their wealth. This entails not only a focus on retirement preparation through adequate savings but also ensuring that their portfolios are positioned to outpace inflation and support future obligations, especially in light of increasing lifespans.

Key elements for targeting regular income streams

#1: Step away from short-term gains, as they may come at a cost

Although it is now possible to capture multiple sources of income – even cash deposits are currently offering compelling interest rates – it is crucial to move beyond temporary, short-sighted options.

While it is tempting to capitalise on market fluctuations in pursuit of quick gains, short-term trading can lead to significant losses and emotional turmoil. Keeping money in a bank account, rather than investing it, could represent an opportunity cost, both in terms of missed returns and lost purchasing power over time. Instead, investors should prioritise long-term strategies that align with their investment objectives across diverse market conditions and policy environments.

#2: Fixed income as a broader asset class

Bonds can typically provide a stable and predictable source of income. In particular, developed countries’ sovereign bonds are often viewed as low-risk investments due to the backing of the issuing government, making them a cornerstone for conservative strategies. Corporate bonds can offer higher yields compared to sovereign bonds, reflecting the additional credit risk. Beyond these more traditional bonds, it is important not to overlook the breadth and depth of debt markets, which encompass an extensive number of segments.  Emerging market debt, issued in developing countries, can offer attractive yields and diversification benefits, though they may be subject to higher volatility and geopolitical risks. Perpetual bonds, which do not have a maturity date, provide coupons indefinitely while shielding investors from the reinvestment risks associated with traditional bonds.

chart - Attractive Yields Compared to the Past Decade Average

#3: Looking outside the “comfort zone” – the importance of diversification

While fixed income investments are often the first option that comes to mind when searching for income, particularly for conservative investors, diversifying into other asset classes can provide additional income streams, enhance capital growth potential, and reduce overall portfolio risk through broader exposure to various sectors and regions.

Diversification is key when seeking income. A diversified approach in terms of sectors and asset classes can help manage market volatility and deliver a smoother return trajectory. A multi-asset approach not only helps manage risk but also provides flexibility to adapt to changing market conditions.

Real assets offer strong inflation sensitivity, allowing investors to be protected from surging price rises evident in recent years. They also generate resilient returns throughout various phases of the economic cycle, providing income streams even during downturns. Beyond asset classes, it is crucial to consider regional diversification, capturing the growth potential in Europe and Asia.

By regularly reviewing and rebalancing, a multi-asset allocation can remain aligned with investors’ financial objectives and risk tolerance. This dynamic approach allows to take advantage of new opportunities and respond to market developments, ultimately enhancing the potential for stable and sustainable income.

chart Multi-assets - 60/40 Expanding the investment universe

Why Amundi for income investing

Leveraging a robust track record and a comprehensive range of investment solutions, Amundi stands out as a top-tier option for income investing. With a global presence and deep expertise across various asset classes, we offer tailored strategies aimed at satisfying diverse client needs. Whether it is financing regular expenses or accumulating more wealth to support their retirement, our disciplined investment approach, combined with rigorous risk management, aims to assist investors in achieving their financial objectives.

 

Amundi Funds US Pioneer

Amundi Funds US Bond

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  Amundi Funds Pioneer US Short-Term Bond fund

Amundi Funds US Short Term Bond

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Amundi Funds Pioneer Income Opportunities

Amundi Funds Income Opportunities

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  Amundi Funds Real Assets Target Income

Amundi Funds Real Assets Target Income

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Balanced Fund

Amundi HK - Balanced Fund

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  Defensive Balanced Fund

Amundi HK - Defensive Balanced Fund 

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EM Bond

Amundi Funds Emerging Markets Bond

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  EM Green Bond

Amundi Funds Asia Bond Income Responsible

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AMATI

Amundi Funds Asia Multi Asset Target Income

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Investment Ideas

This document is not intended as an offer or solicitation with respect to the purchase or sale of securities, including shares or units of funds. All views expressed and/or reference to companies cannot be construed as a recommendation by Amundi.  Opinions and estimates may be changed without notice.  To the extent permitted by applicable law, rules, codes and guidelines, Amundi and its related entities accept no liability whatsoever whether direct or indirect that may arise from the use of information contained in this document.

This document is for distribution solely to persons permitted to receive it and to persons in jurisdictions who may receive it without breaching applicable legal or regulatory requirements. This document has not been reviewed by the Securities and Futures Commission in Hong Kong.

This document is prepared for information only and does not have any regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. Any person considering an investment should seek independent advice on the suitability or otherwise of the particular investment.  Investors should not only base on this document alone to make investment decisions.

Investment involves risk. The past performance information of the market, manager and investments and any forecasts on the economy, stock market, bond market or the economic trends of the markets are not indicative of future performance.  Investment returns not denominated in HKD or USD is exposed to exchange rate fluctuations. The value of an investment may go down or up.

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