Welcome Back, Income.
On the heels of the Fed’s historically aggressive rate hikes, interest rates have surged to levels that haven’t been seen in roughly fifteen years. As a result, fixed income yields are now at readings that a whole generation of investors have never experienced before. Looking ahead, monetary policy appears to be inclined to keep rates ‘higher for longer’. After enduring historically low rates for more than a decade, fixed income has returned to its more traditional role in investors’ portfolios.
Award Winning ETF Issuer
The ETF Express US Awards recognizes excellence among ETF issuers and service providers across a wide range of categories. It was an honor to be singled out among our peers at such a critical time in fixed income, when investors need innovative solutions for navigating rising rates.
Our Fixed Income Family of ETFs
Investors searching for income in an uncertain economic environment should take steps to mitigate risk. We believe in a core plus approach that has a core fixed income vehicle like these three from our WisdomTree family of fixed income ETFs.
A Strategic Solution for Rising Rates: The Barbell Strategy
The barbell approach is a strategic solution for fixed income investing. We believe it’s a particularly valuable tool to utilize in an environment when the bond market is poised to continue to experience elevated volatility. While the Federal Reserve has signaled its intention to keep rates ‘higher for longer’, market perceptions can shift quickly and without much warning.
As a result, we believe it’s prudent to implement a time-tested approach for fixed income investing, such as the barbell strategy, to help navigate volatility without making a specific interest rate ‘call’.
The WisdomTree Barbell Strategy
When USFR, AGZD or HYZD is used in conjunction with our yield-enhanced core strategy, AGGY, we believe it's possible to generate the yield of the Bloomberg U.S. Aggregate Bond Index (Agg), if not more with some pairings, while significantly reducing duration, or interest rate risk. Investors may also want to consider combining our three rate-hedge solutions with their current core bond holdings in an "open-architecture" approach.
Watch this video to learn more about the WisdomTree Barbell strategy, how it works and the tool you can use to see the impact of various fixed income allocations in your portfolio.
What’s Yielding Now
- As of 09/19/23, UST floating rate notes (FRNs) are the highest-yielding Treasury security, at 5.51%
- As of 09/18/23, the WisdomTree Floating Rate Treasury Fund Yield to Maturity was 5.53%
- The SEC 30-day Yield was 5.37%
- UST FRNs are a way to take advantage of the higher yields in the Treasury market without the volatility associated with fixed coupon issues
Source: Bloomberg, as of 09/19/2023
Data represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed or sold in the secondary market, may be worth more or less than the original cost. Current performance may be lower or higher than the performance shown. For the most recent month-end performance please click here.
Click here for Standardized performance data and other important.
Fed Watch: Can I See the Finish Line?
September 20, 2023
During this post-fed Office Hours replay, WisdomTree Senior Economist Professor Jeremy Siegel, Global CIO Jeremy Schwartz and Head of Fixed Income Strategy Kevin Flanagan cover the following topics:
- Results of the September FOMC meeting.
- An in-depth overview of the Fed’s policy statement, updated projections, and Powell’s Presser.
- What investors should be expecting from US monetary policy for Q4.
Seeking income? Two Steps Can Help Reduce Your Risk
Income is back in fixed income, but uncertainty around rates and recession fears have ramped up investor risks. In this video, we share two strategies to help you avoid unnecessary risk when aiming for today’s higher income.
Basis Points Podcast with Kevin Flanagan
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