With bond yields so low, should I still include it as part of my portfolio?

Hi Anon,

We should first answer the question of why are we including bonds as part of your portfolio. When used as part of a portfolio of investments, bonds serve the purpose of diversification from the equities. Put simply, bonds are a traditional asset class which lowers the volatility of your portfolio.

It is unlikely you are invested solely in the bond market. Bond yields are not great for achieving your need for a higher return over the long term. It is also worth noting that there are high yield bonds available for investors but these are typically riskier than investment grade bonds.

At MoneyOwl, we use equities to capture market returns and bonds as a stabiliser of our portfolios. We use bond funds in 4 of our 5 investment portfolios. You can read more here.​​​

Good question👍

If you follow the Modern portfolio Theory. Yes, x% bond, x% equity. That theory emphasis on reduce the volitility of your portfolio, and achieve a level of expected return. So do you have an expected return in a long term?

But some people, dont follow, 100% equity, we have strong heart to take all the portfolio volatilty to maximise gain.