Global central banks have been engaging in more rounds of accommodative measures to stave off slowing growth, pushing yields down with an increasing pile of negative-yielding debt. So, where are investors expected to find attractive income opportunities?
In the upcoming webcast, How to Find Attractive Income Opportunities in a Negative Rate World, Matthew Bartolini, Head of SPDR Americas Research, State Street Global Advisors; Bryan Novak, Senior Managing Director, Astor Investment Management; and Dan Suzuki, Portfolio Strategist, Richard Bernstein Advisors, will outline ways to invest in a negative rate world and highlight strategies for financial advisors to consider incorporating into a diversified portfolio.
For example, the SPDR DoubleLine Total Return Tactical ETF (NYSEArca: TOTL), which is an actively managed ETF backed by bond guru Jeff Gundlach and is seen as an ETF adaptation of the flagship DoubleLine Total Return Fund (DLTNX), may act as a suitable alternative to the traditional Bloomberg Barclays U.S. Aggregate Bond Index.
Investors could also complement existing credit positions in high-yield and investment-grade credit with alternatives like bank loans that access floating rate, move up the capital structure and shortens duration exposure. For instance, 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 subadvises SRLN, is backed by one of the largest senior loan asset managers in the world.
Corporate bonds-related ETFs like the SPDR Portfolio Intermediate Term Corporate Bond ETF (SPIB) can help investors gain exposure to higher yield with a still attractive yield-per-unit-of-duration profile. The one to 10 year space may be a better option than broad corporate or other intermediate five to 10 year exposures.
Additionally, the SPDR Bloomberg Barclays Emerging Markets Local Bond ETF (NYSEArca: EBND) may help investors diversify into the global markets and tap into the higher yield opportunities in the developing economies. The stabilizing dollar outlook also diminishes the danger of taking on emerging currency exposure, which has historically acted as a large source of volatility for investors investing in local-currency-denominated emerging market debt.
Financial advisors who are interested in learning more about attractive income strategies can register for the Thursday, December 5 webcast here.