Including an allocation to fixed-income investments can diversify a portfolio to help manage the overall volatility of returns.

Download the report (PDF)

Along with the other major asset classes, bonds are a vital building block for many portfolios. As a result, it’s important to understand what they are, how they work, and why investors purchase them.

  1. Bonds can offer investors both income and tax advantages.
  2. Fixed-income holdings can help smooth portfolio returns over the long term.
  3. Although fixed income can play a vital role in many portfolios, it is important to avoid overexposure to this, or any other, asset class.
  4. To help balance risk and return, it is helpful to diversify fixed-income holdings broadly—spreading exposure across sectors and global issuers. 

To learn more, download WFII’s report, “Ask The Institute: What Role Can Bonds Play In A Portfolio?”