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📑 Research Notes for 2020-10-09
This week, we look at the enormous demand in fixed income, some basic fixed income "alternatives", and the rise of direct indexing.
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Fixed income assets are seeing “enormous demand.”
Mike Swell, co-head of global fixed income portfolio management at Goldman Sachs Asset Management, says "the death of fixed income has been written too many times" as he is seeing "enormous" demand for U.S. fixed-income assets.
Considering bond alternatives: preferred stock and utilities.
Many question whether high-quality bonds should still be used with equities to form balanced funds, given how far bond yields have fallen. Among predominant bond replacement recommendations are two investments that currently generate higher income than government bonds: 1) preferred stocks and 2) utilities stocks.
Direct indexing to challenge ETFs’ dominance
Look out ETFs — direct indexing is rapidly emerging as the new, new thing for individual investors. Just as ETFs disrupted the wealth management industry in the early 2000s, so too is direct indexing poised to do so now.
Curated by Joseph Lu, CFA®
Joseph has over a decade of experience as an investment professional, primarily in quantitative analysis and portfolio management roles. He is the founder and managing director of Conscious Capital Advisors and a CFA® Charterholder. The CFA charter is a globally respected, graduate-level investment credential by the CFA Institute, a global association of more than 90,000 investment professionals working in over 133 countries.
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