San Francisco, June 26, 2013 (GLOBE NEWSWIRE) -- Income-seeking investors may have more options than they realize, suggests a new analysis "Widening the Search for Income" by Forward (Forward Management, LLC).
"While many income investors are worried about bond market risks and where to find decent yields, they may not have considered all the alternatives available in today's global investment landscape," said Forward CEO Alan Reid. "By casting a wider net for income, they may be able to find investments with a more favorable risk/reward profile while also increasing the diversification of their portfolios."
The research paper highlights three potential income-generating alternatives to traditional bonds:
1) Multisector bond strategies designed to profit from disparities in value among market sectors such as municipal bonds, corporate high yield issues and mortgage-backed securities.
2) Global dividend stock approaches that take advantage of the relatively more attractive valuations of dividend-paying stocks abroad, especially in emerging markets.
3) Emerging market corporate bonds, a relatively new asset class that has quickly grown to $1 trillion with lower sensitivity to interest rates than U.S. corporate bonds and lower correlations to U.S. Treasurys.*
The study cautions investors to be thorough in evaluating the risks that income strategies may pose, including those relating to rising interest rates, credit quality, use of leverage and correlation.
In recent years Forward has significantly expanded its income-generating offerings, with global, dividend, real estate and alternative strategies as well as Forward Income Builder Fund, a multi-asset fund that invests across a diverse range of income-producing asset classes.
About Forward
The world has changed, leading investors to seek new strategies
that better fit an evolving global climate. Forward's investment
solutions are built around the outcomes we believe investors need
to be pursuing - non-correlated return, investment income, global
exposure and diversification. With a propensity for unbounded
thinking, we focus especially on developing innovative alternative
strategies that may help investors build all-weather portfolios. An
independent, privately held firm founded in 1998, Forward (Forward
Management, LLC) is the advisor to the Forward Funds. As of March
31, 2013, we manage more than $6.1 billion in a diverse product set
offered to individual investors, financial advisors and
institutions.
* Source: JP Morgan, as of 11/21/12
You should consider the investment objectives, risks,
charges and expenses of the Forward Funds carefully before
investing. A prospectus with this and other information may be
obtained by calling
(800) 999-6809 or by downloading one from www.forwardinvesting.com.
It should be read carefully before investing.
Forward Income Builder Fund seeks high current income and some stability of principal.
Correlation is a statistical measure of how two securities move in relation to each other.
Valuation is the process of determining the value of an asset or company based on earnings and the market value of assets.
RISKS
There are risks involved with investing, including loss of principal. Past performance does not guarantee future results, share prices will fluctuate and you may have a gain or loss when you redeem shares.
Each allocation fund is a fund of funds, which invest in a mix of underlying Forward Funds. Shareholders of an allocation fund indirectly bear the expenses of the underlying funds. An allocation fund's allocations may be changed at any time. Asset allocation does not assure profit or protect against risk.
Borrowing for investment purposes creates leverage, which can increase the risk and volatility of a fund.
Concentration in a particular industry will involve a greater degree of risk than a more diversified portfolio.
Derivative instruments involve risks different from those associated with investing directly in securities and may cause, among other things, increased volatility and transaction costs or a fund to lose more than the amount invested.
Investing in exchange-traded funds (ETFs) will subject a fund to substantially the same risks as those associated with the direct ownership of the securities or other property held by the ETFs.
Foreign securities, especially emerging or frontier markets, will involve additional risks including exchange rate fluctuations, social and political instability, less liquidity, greater volatility and less regulation.
Investing in lower-rated ("high yield") debt securities involves special risks in addition to those associated with investments in higher-rated debt securities, including a high degree of credit risk.
Mortgage and asset-backed securities are debt instruments that are secured by interests in pools of mortgage loans or other financial instruments. Mortgage-backed securities are subject to, among other things, prepayment and extension risks.
Investing in a non-diversified fund involves the risk of greater price fluctuation than a more diversified portfolio.
Investing in the real estate industry or in real estate-related securities involves the risks associated with direct ownership of real estate which include, among other things, changes in economic conditions (e.g., interest rates), the macro real estate development market, government intervention (e.g., property taxes) or environmental disasters. These risks may also affect the value of equities that service the real estate sector.
Short selling involves additional investment risks and transaction costs, and creates leverage, which can increase the risk and volatility of a fund.
Alternative strategies typically are subject to increased risk and loss of principal. Consequently, investments such as mutual funds which focus on alternative strategies are not suitable for all investors.
Diversification does not assure profit or protect against risk.
There is no guarantee the companies in our portfolio will continue to pay dividends.
Alan Reid is a registered representative of Forward Securities, LLC.
Forward Funds are distributed by Forward Securities, LLC.
Not FDIC Insured | No Bank Guarantee | May Lose Value
©2013 Forward Management, LLC. All rights reserved.