Summary
- Investment grade bonds can offer income, differentiation, and a portfolio ballast, with today’s yield environment potentially enhancing their appeal.
- Active management of IG bond positions can potentially prove important in navigating credit cycles, evaluatin…
Summary
- Investment grade bonds can offer income, differentiation, and a portfolio ballast, with today’s yield environment potentially enhancing their appeal.
- Active management of IG bond positions can potentially prove important in navigating credit cycles, evaluating regional divergences, and identifying sector-specific opportunities.
- We believe the fixed income investment narrative still has legs, and GXIG and EMBD can deliver active exposure with the liquidity and transparency of ETFs.
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Investment-grade (IG) debt has long offered an interesting combination of income and capital preservation potential that’s promoted its stalwart position in diversified portfolios. In the right conditions, it has also served as a tactical allocation, potentially benefiting investors seeking both
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Quick Insights
GXIG and EMBD employ active management to dynamically adjust exposures to issuers, sectors, and geographies, managing risks from credit spreads, duration, and country fundamentals in a volatile rate environment.
Elevated yields, strong credit fundamentals, declining interest rates, and tight spreads favor investment-grade and EM bonds, with EM debt also benefiting from early monetary tightening and improving fiscal dynamics.
IG and EM bonds offer more attractive risk-adjusted compensation, as high-yield spreads remain volatile and may not sufficiently reward investors for additional credit risk relative to investment-grade options.