Fixed income has always served a defensive role within investor portfolios. Normally, when growth is down and risk assets underperform, fixed income outperforms. That’s under normal circumstances, though. In 2022, the Bloomberg aggregate bond index lost 13%. Why? Introduce inflation, and the higher rates employed to combat it. When this happens, risk assets and fixed income fall in lockstep. But those dark days seem to be behind us. We’re now at or near the peak in interest rates. So with bond yields set to stabilise and fall, the value of fixed income assets look poised to rebound. Today’s guest on The Rules of Investing is Jay Sivapalan - Head of Australian Fixed Interest at Janus Henderson Investors. Jay manages Janus Henderson’s Aussie fixed income portfolios, and holds ultimate responsibility for formulating interest rate and sector strategies. We discuss: The macro backdrop that’s shaping fixed income The best times to buy fixed income, and how; and where Jay sees the best risk-reward right now. Transcript 2:10 - Where are we in the cycle? 5:50 - How will fixed income respond during a recession? 19:10 - The best risk adjusted return right now 12:40 - Chasing yield has a time and place 14:00 - Why fixed income over term deposits? 15:10 - The dangers of passive management 17:25 - Qantas (ASX: QAN) still has wings 18:40 - A contrarian call on commercial real estate 21:00 - Semis vs treasuries 22:15 - Don't fall for the consensus view 28:06 - A fixed-income security for the bottom drawer

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