Video: 6 Stock and Bond Considerations for Wealth Managers Amid the Uncertainties

With the slowdown of earnings growth amid continued high inflation and Fed rates, it can be challenging to stay a step ahead of market developments and help clients remain invested. To support you in this uncertain environment, we sat down with FactSet partner Janus Henderson Investments. From that discussion, let’s take a look at six fixed income and equity considerations intended to balance offense and defense in your portfolio strategies. You can also view the full recording.

Fixed Income

• Short duration. Consider going short on the duration curve with balanced, diversified allocations. Short-term, high-quality fixed income is optimal. This means going beyond money markets and Treasuries for potentially higher yield—for example, AAA collateralized loan obligations and short corporate bonds.

• Intermediate duration. Edging into the intermediate side of the curve can help with bond diversification. This is important in the slow-growth environment as intermediate duration could provide some cushion both in higher or lower Fed rate environments.

• Credit market. Investment grade and high yield spreads are "close to tight" historically. Slowing growth could see spreads widen, but the yield cushion can provide defense in future periods of market volatility.

Equities

• Small- and mid-caps. Leadership of the last decade appears to be transitioning as small- and mid-cap stocks are more attractively valued relative to large caps. These can support defense in a recession and offense afterward.

• International. These stocks are typically value-oriented, so they have potential to perform better in this inflationary, high-rate environment. They also have lower valuations. Europe is an attractive market to consider.

• Health care. The sector combines the benefits of both worlds. Many of these equities are defensive as health care needs persist throughout all market and economic cycles. From an offense perspective, biotechnology valuations are attractive and have growth potential.

FactSet Model Center: A No-Cost Marketplace for Wealth Advisors

Our Model Center provides financial professionals with pre-built model portfolios from leading asset managers. It’s available at no cost to many U.S. retail wealth professionals using the FactSet workstation. Janus Henderson Investments is one of the FactSet partners hosting model portfolios on this single, integrated platform. To learn more, visit: FactSet Model Center | FactSet.

The recorded presentation features Greg Sauer, Director of the FactSet Model Center, and Lara Reinhard, U.S. Head of Portfolio Construction and Strategy at Janus Henderson.

This blog post has been written by a third-party contributor and does not necessarily reflect the opinion of FactSet. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.