Fixed Income strategies

Fixed-income investing often takes a backseat compared to the fast-paced stock market, with its daily action and promises of superior returns but if you’re a retired investor, or are approaching retirement, fixed-income investing really should be your main priority.

At this stage in a person’s life, preservation of capital with a guaranteed income becomes the most important goal. Why take the risks when you’re trying to enjoy your retirement that you’ve worked so hard for?

Today, investors need to mix things up, diversify and get exposure to different asset classes to keep their portfolio incomes high, reduce risk and stay ahead of inflation.

That’s why at Moneo Consultants we will always help you to diversify and find the most suitable options for your investment strategy.

1-structured notes

A debt obligation that also contains an embedded derivative component with characteristics that adjust the security’s risk/return profile. The return performance of a structured note will track that of the underlying debt obligation and the derivative embedded within it.

A structured note is a hybrid security that attempts to change its profile by including additional modifying structures. A simple example would be a five-year bond tied together with an option contract. This structure would work to increase the bond’s returns.

2-Income ETF

ETFs provide considerable flexibility in implementing various investment strategies or building investment portfolios. Strategies range from very simple, such as diversifying an existing portfolio, to sophisticated hedging strategies.

ETFs allow the investor not only to diversify across all the major asset classes, such as U.S. equity, foreign equity and fixed income, but also to diversify into investments that have a low correlation to the major asset classes. This includes areas like commodities, real estate, emerging markets, small cap stocks, and others.

3-High dividend fund

High yield bonds are another potential avenue.

They can offer above-market yields are very difficult to invest in individual with confidence, but by choosing a fund with consistent operating results, you can devote a portion of your portfolio to high-yield bond issues as a way to boost fixed-income returns.

Look to find a fund with little to no premium over the NAV (net asset value) for an extra margin of safety when investing here.

4 – Corporate bond

When companies want to expand operations or fund new business ventures, they often turn to the corporate bond market to borrow money from investors. A company determines how much it would like to borrow and then issues a bond offering in that amount; investors that buy a bond are effectively lending money to the company according to the terms established in the bond offering known as the bond covenants.

Over the years, the corporate bond market has attracted many investors seeking higher yields than those offered by government bonds. In general, corporates are the second largest sector in the bond market after government bonds.

5 – REIT

Real estate investment trusts (REITs) are another way to get some high-yielding securities in a conservative portfolio.

They provide liquidity, trade like stocks and have the added benefit of being a distinct asset from bonds and equities. REITs are a way to diversify our modern fixed-income portfolio against market risks in stocks and credit risks in bonds