A Capital Group Investment Insights note by Manusha Samaraweera and Jeremy Cunningham explains why dynamic global fixed income can strengthen portfolio defence and returns as 2026 uncertainty meets stretched valuations.
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Core bonds still diversify equities, but rising developed-market debt and reduced central-bank support may weaken “traditional” safe-haven reliability.
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Flexibility across regions, sectors and currencies can unlock non-traditional defence; EM debt proved an effective diversifier during market stress in 2025.
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With structurally higher yields, bonds offer both income and renewed capital appreciation potential when risk-off conditions emerge.
Explore the full note for practical allocation levers across duration, credit, FX and relative-value opportunities.
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