The Federal Reserve has been putting its more dovish side on display, which pivots from 2018’s rate-hiking bonanza. In addition, fixed income investors are facing other challenges like inverted yield curves and signs of slowing global growth.
Given these challenges, how do investors approach the bond markets?
In the video below, Mark Grant, chief global strategist for fixed income at B. Riley FBR, joins ‘Squawk Box’ to discuss why he thinks bond investors are ‘living in hell” at the moment.
The default bond play to get broad-based exposure might be the iShares Core US Aggregate Bond ETF (NYSEArca: AGG), which tracks the investment results of the Bloomberg Barclays U.S. Aggregate Bond Index. The AGG gives bond investors general exposure to the fixed income markets, but there are times when current market conditions warrant a deconstruction of the AGG to extract maximum investor benefit.
With that being said, as more investors begin to add fixed income to their portfolios, it will take more of a strategic bent. This is especially so since the Federal Reserve said during its fourth and final rate hike in December 2018 that it will do more reassessing, and is now forecasting no more rate hikes for 2019.
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