YieldRisiken

YieldRisiken refers to the potential for an investment's actual return to differ from its expected return, particularly in relation to fixed-income securities like bonds. This concept encompasses various factors that can negatively impact the yield an investor receives.

One primary yield risk is interest rate risk. When interest rates rise, the market value of existing bonds with lower coupon rates falls. This means if an investor needs to sell a bond before maturity, they may receive less than they paid for it, thus affecting their overall yield. Conversely, falling interest rates can increase bond prices, but the investor might miss out on reinvesting coupon payments at higher prevailing rates, leading to a lower realized yield over time.

Another yield risk is credit risk, also known as default risk. This is the risk that the issuer of a bond will be unable to make timely interest payments or repay the principal amount at maturity. Higher credit risk is typically associated with bonds issued by companies or governments with weaker financial standing, and these bonds usually offer a higher yield to compensate investors for taking on that additional risk. If a default occurs, the investor may lose a significant portion or all of their investment, drastically reducing their actual yield.

Reinvestment risk is also a significant yield risk. This is the risk that future coupon payments or maturing principal will have to be reinvested at lower interest rates than the original investment. For investors relying on a steady stream of income from their investments, a decline in interest rates can lead to a reduced overall yield over the life of their portfolio. This is particularly relevant for investors with long-term investment horizons or those relying on their investments for income.