Stocks and bonds typically have low correlations. By combining them, balanced and hybrid funds typically experience less volatility than an all-stock portfolio, and less interest rate sensitivity than an all-bond portfolio. This diversification also may lessen the effect of rising rates.
What are the potential benefits?
- Less interest rate sensitivity than an all-bond portfolio
- Dividends may help to offset negative returns during down markets
Diversified source of income
What does Federated offer in this category?