Managing Fixed Income Allocations During Turbulent Times

After years of a stable, relaxed fixed-income market, investors suddenly face market turbulence that could upend their bond allocations. Alternative fixed income strategies could provide a bulwark for investors to meet the challenges ahead.

In the upcoming webcast, Managing Fixed Income Allocations During Turbulent Times, Bilal Memon, Portfolio Manager, Northern Trust Asset Management, will outline the challenges facing many fixed income investors today and highlight bond fund strategies that could help financial advisors adapt their clients’ portfolios to meet this uniquely unruly market.

For instance, the actively managed FlexShares Core Select Bond Fund (NYSEArca: BNDC) looks to provide attractive risk-adjusted performance by investing in a portfolio of fixed-income securities and is designed to achieve optimal potential for return. Moreover, the active component will adjust to potential changes in interest rate levels, the shape of the yield curve, and credit spread relationships while emphasizing liquidity and diversification.

Using its active management style, BNDC seeks total return and preservation of capital. The fund invests at least 80% of its net assets in U.S. dollar-denominated investment-grade fixed income securities directly or indirectly through exchange traded funds and other registered investment companies.

“We build the BNDC fund to include a consistent risk profile designed to provide stable sector exposures and duration, tactical adjustments to help manage risk and capture potential opportunities, giving access to Northern Trust’s institutional fixed income expertise, exposure to tips to help potentially manage the threat of inflation, and fine-tune the fund’s portfolio through a small number of ETF transactions, rather than through dozens of transactions involving individual securities,” according to FlexShares.

“Our belief is that building a portfolio of ETFs also allows managers to adjust the fund’s composition more efficiently. This structure allows the fund’s managers to express their current views on the evolution of the fixed income market, which may help investors capture opportunities while managing risk.”

Financial advisors who are interested in learning more about fixed-income strategies can register for the Tuesday, June 21 webcast here.