18 18

Return on 10-year bond, 10-year CAGR(%)

16 16
14 14

Govt. 10-year yield (%)

12 12
10 10
8 8
6 6
4 4
2 2
0 0
-2

After having the wind at their backs for decades, xed-

income investors are facing potential headwinds. The risk

in large volatility, and a modest uptick in yields would

produce negative returns

2
General govt. decit, % of GDP

0
-2
-4
-6
-8
-10
-12
-14

interest rates if ination picks up.

 30 *

20

10

0
%

-10

-20

-30 *
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Duration Credit In ation Currency

* Credit factor returns were -34.84% in 2008 and 59.85% in 2009. These data points were truncated to t on the chart.

With the tail wind of falling interest rates likely past, a exible approach should
allow investors the opportunity to generate income from a variety of different sources

Exhibit 8 illustrates two primary points:

Ination

Todays bond market offers

protable total return opportunities for investors who are able to allocate their risk
budgets efciently.
Bloomberg Barclays U.S. Bloomberg Barclays Global
Aggregate Bond Index Aggregate Index
n Duration
n In ation
n Currency
n Credit

Bloomberg Barclays U.S. Bloomberg Barclays Investment

In ation Linked Index Grade Corporate Index

Bloomberg Barclays High S&P Leveraged

Yield Corporate Index Loan Index
 7,680

3,840

1,920
Monthly return (log scale)

960

480

240

120

60

30

Selecting dividend growers/ initiators can be improved upon by avoiding companies that
reduce their dividends before that action.
 25 22.8
Average outperformance (%)

15 11.3
2.5 6.4
5
-5 -.09 -.02
-15
-25 Cut
-32.5
-35
-1-year +1-week +1-month +3-month +6-month +1-year +2-year
Company performance

Source: Wolfe Research Accounting & Tax Policy Research; Company lings; Bloomberg; Standard & Poors; FactSet; Columbia Management Investment Advisers, LLCas of 12/ 31/16.

To nd out more, call 888.800.4347

columbiathreadneedleetf.com
Denitions: The Barclays Global Aggregate Index
and non-U.S. corporate, government, governmental agency, supranational, mortgage-backed and asset-backed xed-income securities. The Barclays Investment-Grade Corporate
Index includes dollar-denominated debt from U.S. and non-U.S. industrial, utility and nancial institution issuers. Subordinated issues, securities with normal call and put provisions

notes with embedded swaps or other special features, as well as private placements, oating-rate securities and eurobonds, are excluded from the index. The Barclays U.S. Aggregate
Bond Index is a market-value-weighted index that tracks the daily price, coupon, pay-downs and total return performance of xed-rate, publicly placed, dollar-denominated and non-
convertible investment-grade debt issues with at least $250 million par amount outstanding and with at least one year to nal maturity. The Barclays U.S. Corporate High Yield Bond
Index is composed of xed-rate, publicly issued, non-investment-grade debt. The Barclays U.S. Government Ination-linked Bond Index
ination-protected securities that have at least one year remaining to maturity on index rebalancing date, with an issue size equal to or in excess of $500 million. The S&P 500 Index
The S&P 500 Geometric Equal-Weighted Total Return Index
The S&P/ LSTA Leveraged Loan Index reects the market-weighted performance of institutional leveraged loans based upon real-time market weightings, spreads and interest

Past performance does not guarantee future results.