- Rising rates have been top of mind for income investors since the start of the year.
- The usual approach to rising rates has two problems. It fails to distinguish between two different rising rate environments and their different impact on assets.
- And it uses the textbook definition of duration which is, at best, misleading as it ignores other important drivers of asset prices besides rates.
- We discuss the two different types of rising rate scenarios, their impact on various assets and the role of empirical duration in security analysis.
- We also highlight a number of different sectors and securities which can potentially remain resilient under one or both rising rate scenarios which we continue to hold in our Portfolios.
For further details see:
Rising Rate Implications For Income Portfolios