But if I knew how to manage my portfolio safer and smarter than most hedge fund managers, I could realistically grow my wealth.
Why ETFs are the best vehicle for your beta exposure
We believe the best vehicle for your beta exposure — the most efficient, tradable and affordable vehicle — is an exchange-traded fund.
Blending index and active exposures allows investors to better manage their market exposures, be selective about those funds and managers where they have high conviction.
Embrace agnosticism as the new bond-market faith. It’s how you’ll keep earning a little bit of money a lot of the time. Easier said than done, of course.
Given this monumental challenge, what’s a bond investor to do? We suggest these three approaches for potentially creating your desired outcomes.
Indeed, there are already signs of that increase as central banks back off from so-called quantitative easing. However, the rise in rates is likely to happen more slowly than past rate normalization processes.
Historically lower interest rates. In our opinion it’s inevitable that interest rates are going to rise, and have a potentially negative effect on bonds.
So, net worth is growing, and liquidity is growing — but the growth of the fixed-income market is actually slowing. That dynamic requires that you use every tool you have at your disposal.
Many of the world’s governments and institutions continue to slow the pace of their debt issuance (de-levering, in the jargon), meaning there’s less product available on the market.
The BlackRock Global Fixed Income team explains how investors can approach today’s ever changing and challenging bond market.
Minimum volatility indexes seek to minimize the effects of the occasional gutter ball, allowing investors to focus more on their long-term investment objectives – the pins at the end of the alley.
So if a min vol strategy tends to outperform the broader equity markets when volatility is on the rise, yet underperform when volatility abates, wouldn’t it just be a wash? Not so fast.
When the equity markets were dropping, the min vol index acted as a cushion in these volatile markets, providing stronger relative performance.
The concept of most of these minimum volatility ETFs (or min vol, as we call them around here) is that they track indexes that seek to capture the broad equity market with a reduced amount of volatility.
“Minimum volatility” is often misunderstood as an investment that’s only useful during volatile markets, but there’s more to the story.
The recent market volatility, combined with the relatively benign rates outlook, also means buying opportunities for the more risk-savvy investors.
The average bid price of leveraged loans touched a low of 95.7% of par on October 16. This was the lowest level since December of 2012.
Last week marked the fourteenth straight week of outflows from leveraged loan mutual funds.
In the week ending October 17, U.S. leveraged loans issuance came in at $6.4 billion across 10 issuers. This was a 40.2% week-on-week decline.
Investors have been very quality conscious, even with junk bonds this year. The higher volatility has not impacted higher-rated junk bonds.
High-yield debt mutual funds recorded a net outflow of ~$0.5 billion in the week ending October 17, reversing the previous week’s trend with net inflows of $1.3 billion.