Why investing in bonds still adds up

Investments and personal finance insights from Vanguard Australia

1 April 2021 Hi everyone, In this week's Smart Investing, Vanguard Senior Personal Finance Writer Tony Kaye builds upon last week's article on why bonds still matter by explaining the recent fall in fixed income prices and why negative returns should not be a concern. We also take a closer look at dividends and distributions, and how they work in an ETF context. Lastly, we have included our March economic and market update which details our global growth forecasts and asset class return projections. Regards, Robin Bowerman Head of Corporate Affairs Vanguard Australia

Why investing in bonds still adds up By: Tony Kaye Despite the recent fall in bond prices, investing in fixed interest securities still makes sense. Here's why. Read more

Dividends and distributions What's a dividend and what's a distribution? Find out the difference between the two and how they work when it comes to ETFs. Read more

Vanguard economic and market update - March 2021 Economic growth levels across most developed countries are increasing but employment trends remain mixed. Read more in our March market update. Read more

VANGUARD IN THE NEWS Manager underperformance: Vanguard thinks you should pay less Emma Rapaport | Morningstar | 19 March 2021 Should you pay less if an active manager underperforms? Vanguard thinks so. The US fund giant's first actively managed Australian fund has hit the market with an Australia-first fee structure which fluctuates to reflect performance. Vanguard Australia active sales development manager Ian Boater says its aim is for both the fund and the end investors to share in the pleasure and the pain of performance. "I think is really important for us that the investment manager also shares in any pain of underperformance, which we hope there isn't any," he says. "It's fairer for the investor as well." To read more, please visit the Morningstar website. Please note the link above will show a copy of the article (where freely available), or the publisher's website if a subscription is required.

IN CASE YOU MISSED IT

Why bonds still matter By: Robin Bowerman Like an insurance policy that benefits a policyholder when something goes wrong, longer duration bonds are able to reduce the volatility of a portfolio during a market downturn. Read more

COVID crash: one year on By: Tony Kaye How have investors fared since the 2020 crash and what are the lessons learned?. Read more

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