Although rising interest rates may challenge those bond investments with the highest sensitivity to interest rates, many parts of global fixed-income markets can provide reduced interest-rate risk and even be used to seek potentially strong performance in a rising interest-rate environment.

Spread sectors (such as U.S. investment-grade corporates, emerging market debt, high yield and bank loans) historically have had lower correlation to more interest-rate sensitive sectors such as U.S. agencies and U.S. mortgage-backed securities. This means there are three main investment strategies that can be utilized within a rising rate environment.

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