When it comes to investing, many people may be quick to focus on equities as the go-to option. However, experts in the field of finance are suggesting that fixed income investments may be the way to go, especially in light of the Federal Reserve’s intention to cut interest rates.
Joanna Gallegos, co-founder and COO of BondBloxx, recently shared her insights on CNBC’s “ETF Edge,” emphasizing the importance of considering opportunities in fixed income before diving back into equities. Despite the 10-year U.S. Treasury note yield hovering around 4.31%, Gallegos believes that the fixed income market still holds promise for investors.
To navigate interest rate volatility effectively, Gallegos recommends looking into exchange-traded funds (ETFs) that focus on intermediate term bonds. By positioning oneself in the intermediate space, investors can benefit from a total return tailwind when rates go down.
Tony Rochte, from Morgan Stanley Investment Management, echoes a similar sentiment, advocating for a medium-term strategy with products like the Eaton Vance Total Return Bond ETF (EVTR). With a 6-year duration and a yield of approximately 6.6%, Rochte views this ETF as a solid investment choice.
Additionally, Rochte highlights municipal bond funds, such as the Eaton Vance Short Duration Municipal Income ETF (EVSM), as attractive options for generating income. By converting a municipal bond mutual fund to an ETF with a yield of around 3.5% and a taxable equivalent yield of nearly 6%, investors can capitalize on the current market environment.
At Extreme Investor Network, we understand the importance of diversifying your investment portfolio and exploring all available opportunities in the financial market. By considering fixed income investments and utilizing expert recommendations, investors can potentially enhance their returns and mitigate risks in an ever-changing economic landscape. Stay tuned for more insightful tips and strategies to help you navigate the world of finance with confidence and success.
