Uncertainty is the name of the game right now for investors, but with uncertainty comes opportunity. The myriad of challenges impacting markets right now may also be driving global yields higher. With the right investment tools, savvy investors and advisors can reap serious yields and give their fixed income allocations a big boost.
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According to recent analysis by T. Rowe Price global fixed income head and CIO Arif Husain, a global competition for capital is helping drive yields up this year. Further yield curve steepening, Husain wrote, owes to continued government debt sales to finance deficit spending. While longer maturity debt may need to offer even greater yields to compete with cash, he suggested, the curve may yet grow steeper overall.
“Furthermore, when factoring in the flood of artificial intelligence-related debt supply, the volume of new bond issuance is even greater than I feared last year,” Husain wrote. “As a result, I expect yield curves to continue steepening in 2026, eventually reaching levels attractive enough to prompt investors to move out of cash.”
Global Yields: An Active Investing Opportunity Set
What’s more, Husain pointed to some other factors to consider for investors crafting or editing fixed income allocations. A healthy growth environment underlines some notable credit opportunities, he wrote, while emerging markets debt, too, could prove an opportunity.
While investors may or may not agree with Husain’s specifics, active investing can help adapt to a shifting picture for the yield curve. Powered by fundamental research, active managers can not only adapt to key market events that may impact the yield curve, but also offer better scrutiny of individual debt issuers.
Especially as investors look for yield in the credit market, identifying more durable issuers can prove a key differentiator in the medium term. Funds like the T. Rowe Price U.S. High Yield ETF (THYF ) offer that kind of targeted, active bond exposure, this time in high yield. For those wanting to add flexibility to their portfolios for a changing yield curve, active can intrigue.
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