Yield not to the yield

The Future Fund cautioned investors against simply chasing high-yielding assets, saying you should consider the risks involved rather than focusing only on yield.

General manager Mark Burgess of the Future Fund made the comment, urging investors to look beyond yield and assess the risks they are prepared to take.

The Future Fund said record low interest rates have pushed up share prices, which can affect the appeal and risk profile of high-yield investments.

The article states the Future Fund benefited from recent market performance, implying markets helped lift the fund's results.

That advice means investors should evaluate the risks, not only the headline yield, before buying high-yield assets—assessing what downside they can tolerate is key.

When a reputable investor like the Future Fund warns about high-yield assets, it highlights that higher yields can come with higher risk, especially in environments where low interest rates have inflated prices.

Low interest rates can make investors hunt for yield in other assets, which can push up share prices and potentially reduce future returns or increase risk, as noted by the Future Fund.

Mark Burgess advised investors to look beyond the yield and carefully consider the level of risk they are prepared to take before pursuing high-yielding assets.