Fixed income investors had an easy time over the past three decades, but with the current environment of higher inflation and an increasing rate outlook, the traditional bond portfolio will have to adapt to the challenges ahead.
In the upcoming webcast, How to Future-Proof Your Fixed Income Allocation, Matthew Bartolini, Head of SPDR® Americas Research at State Street Global Advisors; Scott Ladner, CIO of Horizon Investments; and Komson Silapachai, partner of research and portfolio strategy at Sage Advisory, will question allocation breakdowns of the traditional stock and bond portfolio, highlighting alternative investment strategies that could help better diversify risk and maintain returns for the shifting market conditions.
For example, something like the SPDR Bloomberg High Yield Bond ETF (JNK) could help enhance income generation for bond investors. The SPDR Bloomberg High Yield Bond ETF seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Bloomberg High Yield Very Liquid Index. The fund is a more cost-efficient way to implement a high-yield exposure than via individual bonds.
Fixed income investors could complement existing credit positions in high-yield and investment-grade credit with alternatives like bank loans that access floating rates, move up the capital structure, and shorten duration exposure. The actively managed SPDR Blackstone/GSO Senior Loan ETF (NYSEArca: SRLN) could help investors with better exposure as a manager is more freely able to weave in and out of the fixed income market. Blackstone/GSO, which sub-advises SRLN, is backed by one of the world’s largest senior loan asset managers.
Bond ETFs such as the SPDR Portfolio Mortgage-Backed Bond ETF (SPMB), the SPDR Portfolio Short Term Corporate Bond ETF (NYSEArca: SPSB), the SPDR Portfolio High Yield Bond ETF (SPHY), and the SPDR Barclays Convertible Securities ETF (NYSEArca: CWB) could also help investors pursue total return through alternative fixed income options.
Financial advisors who are interested in learning more about fixed income strategies can register for the Tuesday, November 9 webcast here.