Article

Fixed Income: A strong case for bonds

December 1, 2025
Invesco
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Key Takeaways

1

Credit markets are supported by the stable macroeconomic backdrop and improved financial conditions following interest rate cuts.

2

Local bond rates in select emerging markets may present opportunities given expectations of a weaker USD and investor appetite for diversification.

3

Net inflows into fixed income ETFs are proceeding at record pace, with adoption spanning investor classes.

Over the last couple of years, bonds have been anything but boring. The low-income environment that the world lived through in the aftermath of the global financial crisis has been completely turned on its head.

First a pandemic, then supply chain disruption, and then the outbreak of war in Europe. Each of these factors contributed to the highest level of inflation experienced in a generation, and a cycle of aggressive interest rate hikes from almost all major central banks.

Against this backdrop, fixed income has defied its staid reputation by experiencing almost unprecedented volatility, and now presents rare opportunities. Put simply, the “income” in “fixed income” is back.

As we head into 2025, we believe the case for the asset class is the strongest it has been for years, with the potential peak in interest rates offering the opportunity to lock in a higher level of income for the years to come.

As we step forward into this new environment, it gives us great pleasure to outline what this means across a broad range of fixed income asset classes. Please read on for further insights and analysis.

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  • Investment risks

    The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

    Important information

    Data as at 7 November 2025.

    This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication.

    Views and opinions are based on current market conditions and are subject to change.

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