BONDS: What to Expect

Bonds are a secure and stable offset to more variable equity returns. While bond returns have benefited greatly from dropping interest rates over the past 20-plus years, the future is less certain.

“We are looking ahead to the next 10 to 20 years. While we can’t know the future, we do know that there’s virtually no room for interest rates to continue dropping,” said Geri James, Vice Chair, ONE Joint Investment Board.

Under rising interest rate conditions, bonds will still play a role in a diversified portfolio, James said. However, equities and other alternatives may play a greater role in balancing out weaker bond markets. ONE’s Canadian Equity Portfolio is available to Legal List investors, while those in prudent can access both Canadian and global equity products.

The ONE JIB is also exploring new Prudent Investor fixed income funds options, which will benefit from fewer provincial restrictions and complement the other PI offerings.