The growing segment of exchange traded fund asset managers in the separate accounts space provides asset allocation advisors with more options for downside protection.
ETF Trends’ Tom Lydon sat down with James Breech, PHD, MBA, President and CEO of Cougar Global Investments, to discuss specialized investments ETF strategists offer.
“Most advisors are more comfortable in some kind of strategic asset mix for their clients,” Dr. Breech said.
However, the strategic mix has not always held up during changes in market conditions.
“In a strategic mix, you might have been down 28% in 2008, and it takes years to recover, whereas we were out of the markets in 2008 because, even with our most aggressive mandates, we could get out of the markets,” Dr. Breech added.
After a three decade bully rally in the fixed-income space, we are seeing rate risk and the potential negative effect of rising rates on bond prices.
“As we all know, there is a bond bear market ahead of us,” Dr. Breech said. “It’s going to be serious pain for those 60/40 investors who are in fixed income… and we can manage our most conservative mandates, even though we won’t have any fixed income.”
Watch the video below to see the full interview with Dr. James Breech.
To view past video interviews, visit our video section.