TCW's managing director, Jeffrey Katz, and F/m Investments CEO Alex Morris, have both highlighted the advantages of investing in bonds due to current market conditions. At the Future Proof conference in Miami, Katz pointed to many benefits of fixed income investments. He argued for their growing importance even more as the equity market continues to see persistent swings.
Morris, chief investment officer at F/m Investments, sounded a few warning bells, including economic headwinds. He did emphasize fears over tariffs’ impacts. For him, these factors present very strong reasons to expect investors to return to bonds. Bonds have earned their place ESG in a diversified portfolio,” Morris told ETF Edge, encouraging a responsible approach to investing.
"If you look at where the equity market is going, you didn't like the wipeout of a couple of weeks ago — there's some more banana skins ahead of us." – Alex Morris
The TCW Flexible Income ETF, which launched in November of 2018. It is consistent with TCW’s overall approach to the market, which focuses on connecting investors with stable sources of income. Katz reaffirmed that bonds are performing as expected within a traditional 60/40 portfolio, which aims to balance risks and returns.
"Bonds are acting as they should in the context of a 60/40 portfolio," – Jeffrey Katz
Morris highlighted that his firm offers access to "innovative" strategies designed to mitigate risks, which are increasingly relevant given the current economic backdrop. As their website explains, these strategies offer investors distinctive opportunities to outpace market volatility.
During that final conference conversation, Morris brought home a critical point. Unless Washington, D.C. changes its tune, short-term bonds promise considerable benefits in the near term. He highlighted their importance as a haven for safe investment amid uncertainties that are roiling the markets.
"Particularly on the short end of the curve … there's a lot of safe haven to be had there," – Alex Morris
It’s no wonder both industry leaders would agree that bonds provide a competitive edge for investors looking for stability during unpredictable times. This focus on fixed income speaks to the larger movement towards mitigating risk and investing wisely.
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