Is Painless Diversification Dead?

Interest rates have collapsed in developed economies in past years, and more recently at home in the United States, which has greatly dampened investors’ performance outlook for diversified portfolios. These events have led many investors to question the traditional role of fixed income. In this Topic of Interest white paper, we outline some issues that investors must come to terms with, and we begin to unpick ways of thinking about diversification and preservation of capital in the new market environment.