Falling yields mean many fixed income investors have been forced to accept higher risk to drive returns. We believe ILS is an overlooked tool in diversifying risk and improving returns.

Executive summary:

• Fixed income investors have been boxed in for several years, forced to accept increasingly lower yields
• That box has gotten smaller as the portion of the global bond market trading with negative yields grows
• Falling yields have affected fixed income portfolios of all types, from traditional Barclays Aggregate strategies to income-oriented portfolios
• By thinking outside the box and incorporating insurance-linked securities (“ILS”) in fixed income portfolios, we believe investors could potentially see higher returns and lower risk