As the prospect of easy money comes to an end and we are faced with a more challenging bond market environment, investors will have to adapt their fixed income portfolios to account for a more hawkish Federal Reserve monetary policy outlook.
In the upcoming webcast, Why Today’s Bond Market Demands Active Management, Matthew Cohen, head of ETF sales team at Principal ETFs; Greg Tornga, managing director and portfolio manager at Principal Global Asset Allocation; and Mark Cernicky, investment specialist at Principal Global Fixed Income, will highlight the benefits of an actively managed fixed income investment strategy that is capable of maneuvering through a quickly changing bond market while helping investors generate attractive yield opportunities along the way.
For example, the Principal Investment Grade Corporate Active ETF (NYSEArca: IG) is an option that investors can consider. IG is an actively managed fund, a potentially beneficial trait at a time when demographic shifts could disrupt traditional corporate bond investing. The ETF tries to provide current income and capital appreciation by investing in investment-grade corporate bonds rated BBB or higher by S&P Global Ratings or Baa3 or higher by Moody’s Investors Service.
IG combines bottom-up independent credit research with top-down strategy, seeking alpha through credit selection, industry rotation, curve positioning, and a forward-looking, iterative process. This mechanism seeks credits exhibiting a stable-to-improving credit rating trajectory that may benefit from spread compression and income premiums, an approach that’s relevant in today’s corporate credit climate.
IG may include global exposures as its pool of fixed income securities covers foreign securities, corporate securities, securities issued or guaranteed by the U.S. government or its agencies and instrumentalities, and securities issued or guaranteed by foreign governments payable in U.S. dollars. Additionally, it may invest in other investment companies, including exchange traded funds that invest in fixed income securities.
Financial advisors who are interested in learning more about the bond markets can register for the Wednesday, November 17 webcast here.