Pursue Consistent Risk-Managed Income
The most conservative income investors face a challenging market environment with interest rates on the path to normalization and inflation risks on the rise. In addition to future rate hikes, it is widely expected that the Federal Reserve will soon begin to unwind its roughly $4.5T balance sheet amassed over the most ambitious stimulus effort in central banking history. If this comes to fruition, conservative income investors who have stretched for yield in lower quality income-producing securities may be at risk of losing capital as interest rates rise. At the current inflection point where investors face potentially higher interest rates and a lower nominal growth environment, income investors may be prudent to emphasize consistency, risk-management, and loss limitation in their portfolios going forward. A flexible, bottom-up multi-asset approach focused on high-quality income-producing securities may help investors achieve a more consistent risk-managed approach to avoid over-stretching to yield without regard to capital losses.
Take Action: Learn More About Our Approach to Bottom-Up Multi-Asset Investing
Previous Rising Rate Environments
Westwood Income Opportunity: Key Takeaways
Bottom-Up Multi-Asset Solution
Asset mix diversifies sources of return and is driven by in-depth fundamental bottom-up research
Asymmetric Return Focus
Participation in up markets with an emphasis on protecting capital in down markets
Flexibility allocates across asset classes, capital structures, sectors and market caps that display absolute value
Risk-Focused Growth & Income
Navigates changing market conditions by balancing the trade-offs between capital appreciation, yield and risk
A flexible, bottom-up approach to multi-asset investing could be a way for investors to focus on a consistent risk-managed approach to producing income.