Displaying items by tag: fixed income

Vanguard has introduced its first dynamic asset allocation fixed income model portfolios, expanding its suite with the Fixed Income Risk Diversification and Fixed Income Total Return options. These new models are designed to support financial advisors by actively adjusting allocations throughout the year, guided by Vanguard’s 10-year Capital Markets Model forecasts. 

Aimed at outperforming benchmarks like the Bloomberg U.S. Aggregate and Universal Indexes, the portfolios are tailored to varying risk appetites and investment timelines. The Risk Diversification model emphasizes global investment-grade bonds for stability, while the Total Return model adds high-yield exposure for greater accumulation potential.

 With expense ratios of 0.05% and 0.08% respectively, the models reflect Vanguard’s continued focus on low-cost, research-driven solutions. 

Finsum: Their debut also aligns with broader industry momentum toward model portfolios, with advisors increasingly favoring them over traditional fund-of-funds structures.

Halo Investing has secured $12 million in Series B funding to enhance transparency and competition in structured notes investing. Backed by investors like Allianz Life Ventures and William Blair Circle, the platform aims to make structured notes more accessible by eliminating traditional high minimum investment requirements. 

As the world’s first independent, multi-issuer technology platform for structured notes, Halo enables advisors to offer protective investing in an unbiased, data-driven manner. CEO Jason Barsema emphasized the company’s mission to provide equal investment opportunities for all, from everyday investors to corporate executives. 

The platform streamlines order management, enhances compliance, and optimizes back-office efficiency for issuers and wealth managers. 

Finsum: With this latest innovation, structured notes are a rapidly developing investment framework.

Global private credit is staging a recovery from a decade-low slump, driven by stronger-than-expected global GDP growth and a gradual shift toward looser monetary policy. 

Although deal activity remains below historical norms, transaction volumes grew 7% last year, with deal values rising 15% to $3.5 trillion, bringing the market closer to pre-pandemic levels. Despite lingering valuation gaps and geopolitical uncertainty, optimism is building for a stronger M&A rebound in 2025, which could further boost private credit’s rapid ascent as an alternative financing source. 

The asset class has cemented itself as a critical pillar of corporate lending, filling the gap left by traditional banks and offering borrowers more tailored, flexible funding solutions. Investors are increasingly drawn to private credit’s ability to deliver stable returns and diversify portfolios, fueling further expansion in the sector. 

Finsum: As dealmaking momentum builds, firms are poised to capitalize, leveraging their global network and deep industry expertise to connect capital with opportunity.

With inflation concerns lingering, advisors are closely monitoring the Federal Reserve’s next moves. The Fed held interest rates steady but raised its inflation forecast for the year, while also trimming its growth projection to 1.7%. 

Despite expectations for two rate cuts in 2024, economic uncertainty and potential trade disputes make forecasting difficult. Fixed income investors must remain adaptable, balancing inflation risks with the Fed’s evolving stance. 

Actively managed bond ETFs, such as the Eaton Vance Total Return Bond ETF (EVTR), offer flexibility in navigating rate shifts. By blending investment-grade debt with selective high-yield exposure, EVTR seeks to optimize returns while mitigating risk in an unpredictable market.

Finsum: Active fixed income tends to dominate in macro markets, and that is the current environment that is current environment exactly. 

The rise of private credit has reshaped the landscape of speculative-grade debt, absorbing many of the riskiest borrowers that once relied on public high-yield bonds. With banks retreating from direct lending due to regulatory constraints, private credit firms have stepped in, fueling a market now worth $2.5 trillion globally. 

This shift has left the high-yield bond market with a stronger credit profile, narrowing yield spreads and reducing volatility. However, private credit’s lack of transparency means that credit risk hasn’t disappeared—it has simply moved to a space where prices and risks are less visible. 

While public high-yield bonds have become scarcer and more expensive, some riskier borrowers are returning to public markets through structured investment vehicles. Ultimately, as economic conditions shift, both public and private debt markets may face renewed pressures, exposing hidden risks within private credit’s rapid expansion.

FINSUM: Though private credit obscures some risks, economic stress could still expose vulnerabilities across both public and private debt markets.