Dimensional Presents Bond Strategies Built for Volatility | ETF Trends

After decades of riding on a falling rate environment, fixed-income investors have faced a challenging year with elevated inflation weighing on real yields and hawkish Federal Reserve monetary policies adding to interest rate risks. Nevertheless, there are alternative bond strategies that could still help investors diversify risk and maintain reliable income generation.

In the upcoming webcast, Dimensional Presents Bond Strategies Built for Volatility, Gerard O’Reilly, co-chief executive officer and chief investment officer at Dimensional Fund Advisors, will highlight innovative systematic bond strategies to help financial advisors navigate today’s fixed-income market.

For example, Dimensional offers a variety of funds that cater to a range of risk tolerances, from low-duration options for clients who are more risk-averse with the Dimensional Short-Duration Fixed Income ETF (DFSD) to those that offer longer duration and credit exposure for clients who have a higher risk tolerance in seeking larger returns with products like the Dimensional Core Fixed Income ETF (DFCF). Other strategies offered also include those with exposure to munis with the Dimensional National Municipal Bond ETF (DFNM) as well as those focused on protecting against inflation with the Dimensional Inflation-Protected Securities ETF (DFIP).

Dimensional follows two primary drivers within fixed income, focusing on the term dimension like buying longer versus shorter bonds, and the credit dimension such as buying varying levels of accredited bonds. Decades of research have revealed that investors can achieve higher expected and realized returns over longer time horizons on an upwardly sloping-yield curve. When the yield curve is flat or downward sloping, longer time horizons do not equate to better returns, and therefore shorter-duration investing makes more sense.

“Guided by a strong belief in markets, Dimensional offers strategies that focus on the drivers of expected returns. The firm applies a dynamic implementation process that integrates advanced research, methodical portfolio design, and careful execution while balancing risks, costs, and other tradeoffs that may impact performance. This approach is applied across a full suite of investment strategies to help meet the needs of investors worldwide,” according to Dimensional Fund Advisors.

Financial advisors who are interested in learning more about the bond strategies can register for the Tuesday, November 29 webcast here.