After enjoying the smooth ride for many years, fixed income investors are suddenly faced with the risks associated with rising interest rates. Despite a rapidly changing fixed income environment, there is a path forward for bond investors. By using a rules-based investment approach typically employed in active portfolio construction, investors can improve risk-adjusted returns in the fixed income markets.
In the upcoming webcast, Fixed Income is Back. Goldman Sachs Strategies for 2023., Alexandra Lawson, client portfolio manager, fixed income at Goldman Sachs Asset Management; and Joshua Gorelik, senior manager, FIMA Index Applied Research at FTSE Russell, will outline the risks that fixed income investors face today and highlight research-led bond fund strategies that could help advisors position well for today’s unusual bond market.
For example, the Goldman Sachs Access U.S. Aggregate Bond ETF (GCOR) offers smart beta exposure to the total investment-grade U.S. bond market. GCOR was the first aggregate bond ETF GSAM launched, providing investors exposure across the bond market, which includes the U.S. Treasury, government-sponsored, asset-backed, mortgage-backed, and corporate bonds. The index employs a simple, transparent process that is designed to measure the performance of the U.S. dollar-denominated, investment-grade taxable bond market universe using certain liquidity, technical, and fundamental screening criteria.
“We believe a smart beta approach that screens out select government, mortgage, and corporate issues and issuers may minimize exposure to factors historically associated with volatility and underperformance,” according to Goldman Sachs Asset Management.
GCOR is part of Goldman Sachs’ line of so-called Access ETFs that seek to provide intelligent market exposure with a focus on risk-adjusted returns through a competitive, transparent investment vehicle.
“Access ETFs are among the most competitively priced ETFs on the market. We believe they offer transparency and can alleviate some of the challenges of buying bonds in the over the counter market,” according to Goldman Sachs.
Along with the broad bond market, investors can target specific areas as well. For example, the Goldman Sachs Access Investment Grade Corporate Bond ETF (GIGB). GIGB seeks to provide investment results that closely correspond to the performance of the FTSE Goldman Sachs Investment Grade Corporate Bond Index.
Investors looking for a high-yield option can use something like the Goldman Sachs Access High Yield Corporate Bond ETF (GHYB). GHYB seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Goldman Sachs High Yield Corporate Bond Index.
Financial advisors who are interested in learning more about the fixed-income market can register for the Wednesday, January 18 webcast here.