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A Trend-Following Approach to the Fixed Income Quagmire
Bond investors can consider a dynamic trend-following approach in managing fixed income exposure in today’s market.
In the recent webcast,
Getting Smart About Income, Sean O’Hara, President, Pacer ETFs, argued that fixed income investors face increased challenges in maximizing yields while minimizing risks. Consequently, many are taking on more credit risk to find yield, extending duration to find yield, and looking toward low yields that do not justify the extra risk.
In the U.S. fixed income market, 57% of debt has a yield to maturity of less than 2%, 18% has a yield to maturity of less than 1%, and no bonds have a yield to maturity of greater than 5%. Additionally, roughly 86% of the $60 trillion global bond market traded has yields no higher than 2%. In comparison, nearly 75% of bonds traded with yields above 5% in the late 1990s.
Are Value Managers Measuring the Wrong Thing? March 1, 2021
Value investing is an important part of a diversified portfolio. However, value’s underperformance has made it quite difficult to own. The traditional metric that value mangers use, Price/Book, has not worked in recent years. Free cash flow yield may be a more appropriate way to evaluate value stocks, and could be key in identifying overlooked companies.
In the upcoming webcast,
Are Value Managers Measuring the Wrong Thing?, Sean O’Hara, President, Pacer ETFs Distributors, will explain how targeted investment strategies centered around free cash flow yield can help solidify your portfolio in today’s strenuous investing landscape.