Bull or Bear: How to Prepare 2019 Portfolios for Both

Where has the time gone? As the end of the year quickly approaches, investors should be taking a hard look at their investment portfolios and preparing for 2019.

On the upcoming webcast, Bull or Bear: How to Prepare 2019 Portfolios for Both, Salvatore Bruno, Chief Investment Officer and Managing Director at IndexIQ, and Robert Serenbetz, Portfolio Strategist at New York Life Investments, will review 2018 and recent trends to better help advisors outline potential market risks and opportunities that investors should be looking out for the New Year.

For example, in an environment marred by heightened volatility, investors may turn to alternative strategies to diversify a traditional stock and bond portfolio. IndexIQ has seen alternative strategies like the IQ Merger Arbitrage ETF (NYSEArca: MNA) gain more traction. The ETF employ a type of alternative, “directional hedge fund strategy” called merger arbitrage. Specifically, the fund capture the spread or difference between a stock’s trading price before a deal is announced and its eventual takeover price.

The strategy is designed to take advantage of price discrepancies that exist for companies involved in a merger; can be used as a hedged or alternative investment strategy that benefits by purchasing companies at prices below the target price and capturing the remaining premium; and targeting this spread seeks to deliver returns that are generally immune from fluctuations of the broader market. Additionally, merger arbitrage strategies have historically generated relatively stable returns across various market environments.

Additionally, the Federal Reserve continues to hike interest rates, so bond investors will have to look for ways to adapt to the changing market environment as the traditional benchmark Bloomberg Barclays U.S. Aggregate Bond Index may no longer make the cut.

IndexIQ is also one of the few that offers several smart beta fixed-income strategies, or bond ETFs that do not follow the traditional market cap-weighting scheme, including the IQ Enhanced Core Bond U.S. ETF (NYSE Arca: AGGE) and IQ Enhanced Core Plus Bond U.S. ETF (NYSE Arca: AGGP), and the IQ S&P High Yield Low Volatility Bond ETF (HYLV), the first high yield low volatility fixed income ETF. These smart beta bond ETF strategies could help investors gain exposure to higher quality, high-yield debt as a way to improve returns while diminishing risk.

Financial advisors who are interested in learning more about the market conditions and risks can register for the Wednesday, December 12 webcast here.