Income is Back
Income is back in fixed income, but recession-conscious investors need to actively mitigate risk. Watch the second video in our Focus Points series to see how a core plus strategy can go a big step beyond traditional approaches to help you pursue yield while managing your risk profile. With Head of Fixed Income Strategy, Kevin Flanagan.
Kevin Flanagan:
Hi, I’m Kevin Flanagan, Head of Fixed Income Strategy at WisdomTree. Since the start of 2022, US fixed income yields have risen to levels that a generation of investors have never experienced before.
At WisdomTree, we say that “income is back in fixed income!” – but, with an asterisk. Since the earliest stages of a recession may already be underway, we believe income-seekers have to be careful about avoiding excessive risk. WisdomTree believes in a core plus strategy that blends a core fixed income vehicle with a quality-screened high-yield strategy.
One solution, the WisdomTree US High Yield Corporate Bond Fund (ticker WFHY) applies this vital quality screen by eliminating public issuers with negative cash flows. In the post-pandemic climate, we all saw the importance of fundamentally-sound companies with strong cash flows. This solution goes a big step beyond market cap weighting, to help weed out companies that may be burdened with elevated credit risk. Another opportunity within a core plus strategy is the WisdomTree Yield Enhanced Aggregate Bond Fund, (ticker AGGY). Using a rules-based approach, it re-weights the subcomponents of the Bloomberg U.S. Aggregate Bond Index in an effort to enhance yield without adding risk.
To learn more about ways to generate income and mitigate risk, visit WisdomTree.com/Income or speak to your WisdomTree representative today.
