Curiosity in fixed income sparked after interest rates started to move higher three years ago, said Erin Lyons, co-head of credit research firm CreditSights. “It didn’t make sense for you to put your cash there. So we saw a lot of investors focusing on equity markets and then moving into alternatives,” she said. “Now that rates are back up … it’s a viable asset class.” Income and yield-focused portfolios are gaining popularity with clients for several reasons, said Mike Casey, president of American Executive Advisors in Washington, D.C. One of the main factors is the ability to gain earnings even when the market is flat or choppy, he said. “A portfolio with strong yield and income can help offset some downside volatility and preserve overall portfolio value,” he said. “There are more income and yield generating options now than ever before including traditional bonds, structured products, private credit funds, equity income ETFs and more.” Dane May, co-founder and principal of DePaolo & May Strategic Wealth has also seen a strong resurgence in interest in fixed income, particularly in shorter-duration instruments. Even more notably, he said, is rising interest in ETFs that stack Treasury bill yields with additional income from risk premiums. These are similar in spirit to structured notes but delivered in ETF form, such as Simplify Enhanced Income ETF (HIGH) and Simplify Treasury Option Income ETF (BUCK). “After back-to-back years of strong equity performance, combined with a new administration pushing meaningful policy shifts, many investors are turning to fixed income. Add in attractive T-bill rates and greater access to ETF-based strategies that reduce correlation without relying on traditional credit or duration, and it’s easy to see why this space is gaining traction.” Henry Yoshida, CEO and founder of Rocket Dollar said “If fixed income serves as a tool in your portfolio to generate an income stream, then it’s fulfilling a specific purpose regardless of the immediate interest rate environment. However, if you are holding fixed income in your portfolio solely for diversification, investors may benefit from other assets that are noncorrelated to equities, such as private credit, real estate and other alternative investments.” When it comes to investing, it is important to have a carefully planned mix of bonds as well as stocks, and to diversify the portfolio within those different types of investments, said David B. Rosenstrock, director of financial planning and investments at Wharton Wealth Planning. This can help investors ride out periods of uncertainty, such as the one we are currently experiencing with tariffs, he said. One role of bonds in a portfolio in addition to providing income is to smooth out and reduce the volatility, said Rosenstrock. Bonds can provide an additional stream of income in a portfolio, with less risk than stocks, he said.