Advisor's Edge: Should Your Clients’ Funds Borrow to Invest in Debt?


Media Source: Advisor’s Edge   |   April 19, 2022

Should your clients’ funds borrow to invest in debt? Advisor’s Edge published an article on April 19, 2022, asking whether clients’ funds should borrow to invest in debt or not.

With inflation wiping out returns from investment-grade bonds, advisors may seek additional tools to increase their clients’ returns from fixed income.

Some alternative funds borrow cash to buy corporate and government bonds, but this use of leverage carries some downside risk. Wes Ashton, CIM, FCSI, said, “A bond fund that uses leverage could be attractive because real bond yields are negative.”