Income alternatives to bonds as interest rates rise

For some investors, uncertainty in the bond market and a relentless rise in rates driven by inflation, geopolitical concerns and other factors is enough to throw in the towel, or at least significantly limit their exposure to fixed income .

While many advisors and strategists said bonds should remain part of a diversified investment portfolio, they are shifting allocation to lower-duration alternatives such as ultra-short bonds . Others are looking for complementary non-fixed income products for investors who want less exposure to bonds. "There are certainly a host of alternative strategies that can create current income in a portfolio," said Tyler Glover, managing director of private wealth management consulting services at William Blair.

These options include insurance-linked securities, master limited partnerships, covered call ETFs, dividend-paying stocks, REITS, preferred stocks, asset-backed securities and merger arbitrage trades.