Do rising interest rates reduce returns on income investment?

(Oct 9): Our research, which looks at episodes of rising rates since 1970, suggests income-producing assets do not perform as investors might expect.

Many will remember to their cost the infamous “taper tantrum” in June 2013. It was the moment Ben Bernanke, the then-chairman of the US Federal Reserve, indicated that quantitative easing (QE) would be scaled back, or tapered.

The QE programme had fed money into the financial system to stimulate the economy, following the financial crisis of 2008. It had helped keep the yields on government bonds at exceptional lows.

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