Arabic version: المستثمرون يستكشفون بدائل للدخل مع ارتفاع عوائد السندات

According to Cnbc, financial advisers and investment strategists still say bonds should remain in diversified portfolios, even as some investors reduce fixed-income exposure because of rising rates. Many are shifting allocations toward lower-duration options such as ultra-short bonds, while also considering products that can produce current income outside traditional bonds.

Tyler Glover, managing director of private wealth management consulting services at William Blair, said there are alternative strategies that can create current income in a portfolio. Options cited include insurance-linked securities, master limited partnerships, covered-call ETFs, dividend-paying stocks, REITs, preferred stocks, asset-backed securities and merger-arbitrage trades.

Those alternatives involve tradeoffs. Matt Gentzkow, managing director of Coastal Bridge Advisors, said investors seeking income beyond bonds because of inflation risks and concern about rising rates may add other risks to their portfolios. He also cautioned against concentrating income-generating assets in one sector. Some popular stock-market income investments are themselves sensitive to interest rates, while higher bond yields can make riskier alternatives less attractive on a yield-only basis.

Within nontraditional fixed income, Paul Karger of TwinFocus Capital Partners favors catastrophe bonds, which transfer natural-disaster risk to capital-market investors. He said the asset class often offers mid-to-high-single-digit returns, though returns can turn negative when catastrophes and insurance claims rise. Elsewhere, dividend stocks and REITs can provide income and potential appreciation but carry greater market volatility than bonds. Merger arbitrage may offer returns uncorrelated with interest-rate risk, though Morningstar noted that losses can be significantly larger if a deal breaks. Stuart Katz of Robertson Stephens is also looking at private lending backed by real assets, citing shorter durations but risks including illiquidity, asset depreciation and collateral collection.