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Client Conversations: Managing Risk in Your Fixed-Income Portfolio

September 2018

Changes in the economy and interest rates can have a big impact on your fixed-income portfolio.

Client Conversations gives financial advisors an easy way to communicate with clients on topics influencing financial markets; it highlights common investor behaviors and offers ways to address the challenges investors face. Share this article with your clients, and remember to follow your firm's policies that govern sharing content with clients and prospects.


Changes in the economy and interest rates can have a big impact on your fixed-income portfolio. Your financial advisor can help you build a portfolio that’s right for you based on your goals and how much risk you’re comfortable with taking. Keep in mind that diversification does not assure a profit, protect against a loss, or eliminate market risk.

 

Annual Returns of Fixed-Income Asset Classes Represented by Indices as of 12/31/17

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Data Source: Morningstar, Inc., 1/18

*Data Source: St. Louis Federal Reserve, Federal Reserve H15 Report, 1/18

Past performance does not guarantee future results.

Indices are unmanaged and not available for direct investment, and do not represent the performance of any Hartford Fund.

 

Fixed-Income Strategies

Funds A F I R3 R4 R5 R6
Hartford Emerging Markets Local Debt HLDAX HLDFX HLDIX HLDRX HLDSX HLDTX  
Hartford Schroders Emerging Markets Multi-Sector Bond SMSVX HFZFX SMSNX HFZRX HFZSX HFZTX  
Hartford Floating Rate HFLAX HFLFX HFLIX HFLRX HFLSX HFLTX  
Hartford Floating Rate High Income HFHAX HFHX HFHIX HFHRX HFHSX HFHTX  
Hartford Schroders Global Strategic Bond SGBVX HSBFX SGBNX HSBRX HSBSX HSBTX  
Hartford High Yield HAHAX HAHFX HAHIX HAHRX HAHSX HAHTX  
Hartford Inflation Plus HIPAX HIPFX HIPIX HIPRX HIPSX HIPTX  
Hartford Municipal Income HMKAX HMKFX HMKIX        
Hartford Municipal Opportunities HHMAX HHMFX HHMIX        
Hartford Municipal Short Duration HMJAX HMJFX HMJIX        
Hartford Quality Bond HQBAX HQBFX HQBIX HQBRX HQBSX HQBTX  
Hartford Short Duration HSDAX HSDFX HSDIX HSDRX HSDSX HSDTX  
Hartford Strategic Income HSNAX HSNFX HSNIX HSNRX HSNSX HSNTX HSNVX
Hartford Schroders Tax-Aware Bond STWVX HFKFX STWTX        
Hartford Total Return Bond ITBAX ITBFX ITBIX ITBRX ITBUX ITBTX ITBVX
Hartford World Bond HWDAX HWDFX HWDIX HWDRX HWDSX HWDTX HWDVX

Talk to your financial advisor today about managing risk in your fixed-income portfolio

Client Conversations gives financial advisors an easy way to communicate with clients on topics influencing financial markets; it highlights common investor behaviors and offers ways to address the challenges investors face. Share this article with your clients, and remember to follow your firm's policies that govern sharing content with clients and prospects.


Important Risks: Investing involves risk, including the possible loss of principal. There is no guarantee a fund will achieve its stated objective. Security prices fluctuate in value depending on general market and economic conditions and the prospects of individual companies. ● Fixed income security risks include credit, liquidity, call, duration, and interest-rate risk. As interest rates rise, bond prices generally fall. ● Investments in high-yield (“junk”) bonds involve greater risk of price volatility, illiquidity, and default than higher-rated debt securities. ● Municipal securities may be adversely impacted by state/local, political, economic, or market conditions. Investors may be subject to the federal Alternative Minimum Tax as well as state and local income taxes. Capital gains, if any, are taxable. ● Foreign investments may be more volatile and less liquid than U.S. investments and are subject to the risk of currency fluctuations and adverse political and economic developments. These risks may be greater for investments in emerging markets.

Hartford Floating Rate Fund and Hartford Floating Rate High Income Fund should not be considered as alternatives to CDs or money market funds. These Funds are for investors who are looking to complement their traditional fixed-income investments.

Investors should carefully consider a fund’s investment objectives, risks, charges and expenses. This and other important information is contained in the fund’s prospectus and summary prospectus (if available), which can be obtained by visiting hartfordfunds.com. Please read it carefully before investing. 

Index data for FTSE World Government Bond Index © 2018 Citigroup Index LLC (“Citi Index”). All rights reserved. CITI is a trademark and service mark of Citigroup Inc. or its affiliates, is used and registered throughout the world, and is used with permission for certain purposes by Hartford Funds Management Group, Inc. Hartford World Bond Fund is not sponsored, endorsed, sold or promoted by Citi Index, and Citi Index makes no representation regarding the advisability of investing in such fund. Reproduction of the Citi Index data and information (collectively, “Citi Data”) in any form is prohibited except with the prior written permission of Citi Index. CITI INDEX GIVES NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF ACCURACY, ADEQUACY. MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. Citi Index is not responsible for any errors or omissions in, or for the results obtained from use of, Citi Data, and in no event shall Citi Index be liable for any direct, indirect, special or consequential damages in connection therewith.

High Yield Bonds are represented by the Bloomberg Barclays Corporate High Yield Index, which covers the USD-denominated, non-investment grade, fixed-rate, taxable corporate bond market. Short-Duration Bonds are represented by the Bloomberg Barclays 1-3 Gov’t./Credit Index which is composed of the Bloomberg Barclays Government and Corporate Bond Indexes, including U.S. government Treasury and agency securities as well as corporate and Yankee bonds, with maturities between 1 and 3 years. Municipal Bonds are represented by the Bloomberg Barclays Municipal Index, which covers the USD-denominated long term tax exempt bond market. Long-Duration Bonds are represented by the Bloomberg Barclays U.S. Long Gov’t./Credit Index, which includes all bonds covered by the Bloomberg Barclays Gov’t./Corp. Bond Index with maturities of ten years or longer. Investment Grade Corporate Bonds are represented by the Bloomberg Barclays U.S. Corporate Investment Grade Index which measures the performance of investment grade corporate bonds. U.S. Government Bonds are represented by the Bloomberg Barclays Government Bond Index, which is made up of of the Treasury Bond Index and the agency Bond Index, as well as the 1-3 Year Government Index and the 20+ Year Treasury Index. TIPS (Treasury Inflation Protected Securities) are represented by the Bloomberg Barclays U.S. TIPS Index, which represents securities that protect against adverse inflation and provide a minimum level of real returns. Global Government Bonds are represented by the Citigroup World Government Bond Index, which is composed of 14 world government bond markets with maturities of at least 1 year. Bank Loans are represented by the CSFB Leverage Loan Index, which is a representative index of tradable senior-secured U.S. dollar-denominated non-investment grade loans. Cash Investments are represented by the BofAML US Treasury Bill 3 Months, which measures the performance of a single issue of outstanding treasury bill which matures closest to, but not beyond, three months from the rebalancing date. EM Debt is represented by the JP Morgan GBI Emerging Markets Global Diversified Index, which is a comprehensive global, local emerging-markets index, and consists of liquid, fixed-rate, domestic-currency government bonds. Diversified Portfolio is represented by an equal portion (12.5% each for 1992, 11.1% each for 1993-1997, 10% each from 1998-2001, 9.1% each from 2002-2016) of the previously listed indices. Data Source: Morningstar, Inc., 1/17 

For current performance information of Hartford Funds, please see hartfordfunds.com.

 

This information should not be considered investment advice or a recommendation to buy/sell any security. In addition, it does not take into account the specific investment objectives, tax and financial condition of any specific person. This information has been prepared from sources believed reliable but the accuracy and completeness of the information cannot be guaranteed. This material and/or its contents are current at the time of writing and are subject to change without notice. This material may not be copied, photocopied or duplicated in any form or distributed in whole or in part, for any purpose, without the express written consent of Hartford Funds. 

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