Julien Houdain, Schroders Global Head of Unconstrained Fixed Income Investments, pointed out that in the new era of high interest rates lasting for decades and policy divergence among central banks worldwide, investors can no longer view bonds as simple income-generating and defensive asset allocations. Only through active management of duration, geographic allocation, and credit risk can investors seize profit opportunities in complex markets and make bonds once again the "core income engine" of their portfolios. Prior to 2022, the world was in a zero interest rate environment, and bond investments relied heavily on "credit spreads," with the importance of duration being very low. However, interest rate trends have now become the core focus of bond management. The current high interest rates are indeed enough to withstand market volatility. Even defensive portfolios can still generate a yield of around 5-6%. While the yield opportunities remain attractive, the management difficulty has significantly increased. Relying solely on passive income without actively managing interest rate risk may lead to a situation of "gaining interest but losing price." In other words, while income is still attractive, how to manage interest rate sensitivity will determine the success or failure of investments. A major characteristic of the current bond market is the sharp divergence in policy and interest rate curves among various countries. Japan and Germany are promoting fiscal stimulus measures, leading to rising long-term interest rates, while the focus in the US and the UK is on inflation normalization and labor markets. This divergence means that investors must separate and manage "interest rate risk" and "credit risk." Even if one is optimistic about European companies benefitting from stimulus policies, it does not necessarily mean that one must take on European interest rate risk. In this case, interest rate differential strategies must be used to shift interest rate risk to other regions. Additionally, the high debt issues in some developed countries will lead to fiscal vulnerability, so focusing on short-term bonds in the front end of the yield curve (around 0-5 years) is preferred to avoid the structural pressure resulting from deficit expansion. Despite geopolitical tensions, the current initial yield rates provide a buffer for a variety of future scenarios. Unless there is an extreme inflation shock, it is unlikely that bonds will incur losses in the next year, as the coupon rate itself serves as the best buffer. However, because credit spreads are currently at historic lows, actively managing bond investments is crucial. Schroders' global investment approach advocates a "bottom-up" bond selection strategy to eliminate biases and combine in-depth fundamental research with systematic quantitative tools. In an environment of fiscal expansion, diverging central bank policies, and rising geopolitical risks, the message to investors is clear: bonds are still worth investing in, but the key to success lies in maintaining flexibility, having a global presence, and staying disciplined in risk management.