The central bank monetary policy has been accommodative for years, but with the Fed raising benchmark interest rates, investors will need to adapt their mindset—and their portfolios—to the realities of a changing market environment.
In the upcoming webcast, What Rising Rates and a Shifting Economic Landscape Mean for Your Portfolio, Matthew Bartolini, Head of SPDR® Americas Research, State Street Global Advisors; Eric Biegeleisen, Partner, Deputy Chief Investment Officer, 3EDGE Asset Management; and Greg Ellston, Chief Investment Officer – Asset Allocation, Confluence Investment Management, will explore what rate hikes mean for the economy and outline strategies financial advisors can use to adjust their client portfolios.
For example, 3EDGE Asset Management offers a suite of investment solutions for financial advisors, including the 3EDGE Income Plus Strategy, which seeks income opportunities worldwide and across a variety of asset classes. As shown below, the Strategy invests in traditional equity and fixed-income sources and non-traditional sources of income to provide diversification and potentially higher sources of income. While the Strategy seeks attractive yield opportunities, it pays careful attention to risk by making tactical changes based on our proprietary 3EDGE Global Capital Markets model. Investment exposure is achieved primarily through the use of exchange traded funds.
Additionally, the 3EDGE Total Return Strategy is a globally diversified, multi-asset portfolio, invested across a wide variety of asset classes and geographies. Investment exposure is achieved primarily through the use of index exchange traded funds. The investment objective is to generate long-term capital appreciation and attractive risk-adjusted returns over full market cycles. The TR Strategy may be appropriate for investors who are more focused on the longer-term capital appreciation and have a time horizon of more than three years, at least for this component of an investor’s overall liquid assets.
Confluence Investment Management LLC also offers a suite of ETF model portfolio strategies, such as the Income strategy, which primarily focuses on reliable income and is appropriate as a complementary strategy for investors in the distribution phase of their investments. The majority of its allocation is in fixed-income asset classes, with the core being a ladder of target maturity ETFs, with each of the next ten years representing a fixed percentage of assets. A small portion of the portfolio may include real estate, equities, and commodities to contribute to growth potential and diversification benefits. When appropriate, the profile is similar to a diversified bond portfolio with a small portion allocated to equities.
Confluence’s Income with Growth strategy is oriented toward reliable income, moderate volatility, long-term growth, and principal preservation. Although the portfolio typically has the majority of its allocation in fixed-income asset classes, a smaller portion may include real estate, equities, and commodities. These asset classes contribute growth potential along with diversification benefits. The profile is similar to that of a diversified bond portfolio alongside a smaller proportion of equities.
Additionally, Confluence’s Growth & Income strategy combines growth and income objectives with more emphasis on growth. The growth allocation may include equity asset classes ranging from small cap to large cap, with both domestic and international equities. Commodities may be utilized for total return as well as diversification benefits. Fixed-income and real estate allocations will normally form the foundation to pursue income objectives. The profile is similar to a portfolio with a blend of stocks and bonds.
Financial advisors who are interested in learning more about portfolio strategies for rising rates can register for the Tuesday, May 10 webcast here.
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