Fixed Income as an Asset Class has historically been used as a more defensive asset in portfolio construction. The total return of bonds is comprised of two components, the income stream and the capital / price movements of the asset. In South Africa, the average income paid out from bonds (All Bond Index) is approximately 10.5%. When bond yields decrease the price goes up and vice versa - this is the capital return component of a bond. Based on current forecasts, bonds are expected to return between 15 and 20% over the next 12 months.

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