It’s not news to anyone that we’re in a low, potentially even negative, real interest rate environment. There’s little on the horizon to suggest change. What’s an advisor to trying to generate client cash flow to do? Think outside the aggregate.
In the upcoming webcast, Tactical High Yield Solutions for Today’s Yield-Starved Environment, Jeffrey Thompson, CEO, Donoghue Forlines; and Matthew Bartolini, Head of SPDR Americas Research, State Street Global Advisors, will discuss how to include other income generating assets in your portfolio, but more importantly, how to think about managing risk in the hunt for yield.
For example, the recently launched TrimTabs Donoghue Forlines Tactical High Yield ETF (DFHY) can help participate in the high yield bond market that offers generally high coupon rates that provide a high level of current income.
The TrimTabs Donoghue Forlines Tactical High Yield ETF tries to reflect the performance of the TrimTabs Donoghue Forlines Tactical High Yield Index, which aims to capture the majority of the upside and avoid the majority of the downside of the high yield asset class during a full credit market cycle.
The ETF can identify intermediate term trends and be invested in the high yield asset class for the majority of an uptrend, moving into a defensive position to avoid downtrend.
“The strategy utilizes proprietary defensive ‘Tactical’ indicators to attempt to mitigate downside volatility and preserve capital by shifting primarily towards intermediate term treasury exposure during market declines,” according to TrimTabs. “High Yield bonds have typically been less interest rate sensitive than higher quality fixed income asset classes and not as volatile as dividend paying stocks.”
“We believe that combining High Yield with Tactical Defensive Risk Management is a differentiator in Index and ETF construction,” adds Donoghue Forlines.
Financial advisors who are interested in learning more about a tactical high-yield strategy can register for the Thursday, January 21 webcast here.