Three Concepts Seeking to Enhance Risk-Adjusted Yield

In a yield-starved world, there has been a proliferation of new income investment solutions. While innovation is welcome, many of these solutions stretch the risk boundaries of traditional income asset classes by utilizing increasingly complex instruments. We believe these new capabilities can offer opportunities, but investors need to be more mindful than ever of potential hidden risks. We have identified three primary areas of focus for investors looking to enhance their portfolio’s risk-adjusted yield:

Find Opportunities in an "Uncurved" Yield Curve

Put Cash to Work

A flattened yield curve is a boon to cash investors as less risky, shorter-term Treasuries offer similar yields as higher-risk, longer-term Treasuries.

De-Risk Traditional Core Bonds

Short duration can reduce portfolio interest rate risk without a meaningful yield reduction.

Go Global

Developed world bonds can help diversify U.S.-specific duration with relatively similar risk.

Consider Agency Mortgages

Mortgage-backed securities can offer diversification within the sub-asset classes of traditional fixed income.

Core fixed income investment considerations

Short Duration Income ETF

VNLA

Our Cash PLUS ETF – A capital preservation and income-focused ETF that seeks returns above cash
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HFAIX

Developed World Bond Fund

Investing across a wide range of fixed income securities, the Fund seeks income and total return while actively managing duration and credit exposure
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Mortgage-Backed Securities ETF

JMBS

Seeking above-market total returns by modeling inefficiencies in borrower behavior
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Dynamic Credit: Low Risk in High Yield

While we believe there are ample opportunities in higher-yielding, equity-like fixed income markets, we also think investors must use discretion when using these higher-octane strategies. Delegating to dynamic, multisector credit strategies creates the potential to maintain exposure to higher yields in credit markets while potentially de-risking single sector risk.

JMUIX

Multi-Sector Income Fund

For investors seeking a steady stream of high income with lower risk than a dedicated high-yield strategy
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The Equity Income Blindspot

Given large concentrations in U.S. equities, some investors may not recognize the significant income potential in overseas equities. Depending on risk tolerance, it’s convenient for many income investors to seek opportunities to reallocate equities globally, where yields can commonly be double or triple that of U.S. equities.

HFQIX

Global Equity Income Fund

A high-conviction strategy that targets high, dependable income from high-yielding, high-quality global equities
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An Investment Approach Driven by Bold Thinking

We believe in confronting uncertainty head-on – not merely reacting to change but finding opportunity in it. Hear from our investment professionals on how they apply this approach in their fundamental research, part of an ethos we call
Knowledge. Shared.

Market GPS: A Soft Landing Should Support Fixed Income in 2020

In our view, the Federal Reserve’s accommodative stance should persist throughout 2020, helping sustain the expansion of the U.S. economy.

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Market GPS: Search for Stable Income Continues in 2020

Portfolio Manager Seth Meyer discusses the importance of identifying stable sources of income in the year ahead.

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Market GPS: Outlook for Bond Markets Hinges on Trajectory of Global Economy

Co-Heads of Strategic Fixed Income Jenna Barnard and John Pattullo discuss the outlook for bond markets in 2020.

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