Episode 230 – Maximizing Returns in a New Rate Environment with Kevin Flanagan

WisdomTree works to create a better way to invest, offering a leading product range that offers access to an unparalleled selection of unique and smart exposures.

Kevin Flanagan is the Head of Fixed Income Strategy at WisdomTree, joining us to share expert insights on the shifting yield curve, Federal Reserve rate strategies, and actionable tips for managing fixed-income portfolios in today’s evolving market.

Also discussed:

• The phenomenon of an inverted yield curve and its recent movement back to positive territory.
• How different segments of the yield curve respond to market expectations for Federal Reserve rate cuts and the complexities in yield curve movements.
• The concept of “money in motion,” describing how investors are adjusting their portfolios in response to a new rate regime, particularly by moving from shorter-term to intermediate-term bonds.
• WisdomTree’s “barbell strategy,” blending short-term floating-rate notes with longer-term investment-grade bonds to navigate the current rate environment and generate yield.
• The re-emergence of fixed income as a key portfolio component, given the higher yield levels compared to the past decade, offering investors more traditional opportunities in bond markets.
• Risks that could disrupt the Federal Reserve’s current rate path.

Resources: WisdomTree

 

Investors should carefully consider the investment objectives, risks, charges and expenses of the Fund before investing. For a prospectus or, if available, the summary prospectus containing this and other important information about the fund, call 866.909.9473 or visit WisdomTree.com/investments. Read the prospectus or, if available, the summary prospectus carefully before investing.

Yield curve: Graphical Depiction of interest rates on government bonds, with the current yield on the vertical axis and the years to maturity on the horizontal axis.

Consumer Price Index (CPI): A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. The CPI is calculated by taking price changes for each item in the predetermined basket of goods and averaging them; the goods are weighted according to their importance. Changes in CPI are used to assess price changes associated with the cost of living.

There are risks involved with investing, including the possible loss of principal.

USFR risk information: Securities with floating rates can be less sensitive to interest rate changes than securities with fixed interest rates, but may decline in value. Fixed income securities will normally decline in value as interest rates rise.  The value of an investment in the Fund may change quickly and without warning in response to issuer or counterparty defaults and changes in the credit ratings of the Fund’s portfolio investments. Due to the investment strategy of this Fund it may make higher capital gain distributions than other ETFs.  Please read the Fund’s prospectus for specific details regarding the Fund’s risk profile.

AGGY risk information: Fixed income investments are subject to interest rate risk; their value will normally decline as interest rates rise. Fixed income investments are also subject to credit risk, the risk that the issuer of a bond will fail to pay interest and principal in a timely manner, or that negative perceptions of the issuer’s ability to make such payments will cause the price of that bond to decline. Investing in mortgage- and asset-backed securities involves interest rate, credit, valuation, extension and liquidity risks and the risk that payments on the underlying assets are delayed, prepaid, subordinated or defaulted on. Due to the investment strategy of the Fund, it may make higher capital gain distributions than other ETFs. Please read the Fund’s prospectus for specific details regarding the Fund’s risk profile.

MTGP risk information: Fixed income investments are subject to interest rate risk; their value will normally decline as interest rates rise. In addition, when interest rates fall income may decline. Fixed income investments are also subject to credit risk, the risk that the issuer of an investment will fail to pay interest and principal in a timely manner, or that negative perceptions of the issuer’s ability to make such payments will cause the price of that investment to decline. Investing in mortgage- and asset-backed securities involves interest rate, credit, valuation, extension and liquidity risks and the risk that payments on the underlying assets are delayed, prepaid, subordinated or defaulted on. Liquidity risk may result from the lack of an active market, reduced number and capacity of traditional market participants to make a market in fixed income securities, and may be magnified in a rising interest rate environment and/or with respect to particular types of securities, such as securitized credit securities. Non-agency and other securitized debt are subject to heightened risks as compared to agency-backed securities.  High yield or “junk” bonds have lower credit ratings and involve a greater risk to principal. Derivative investments can be volatile and these investments may be less liquid than other securities, and more sensitive to the effects of varied economic conditions. Unlike typical exchange-traded funds, the Fund is actively managed using proprietary investment strategies and processes and there can be no guarantee that these strategies and processes will be successful or that the Fund will achieve its investment objective.  Due to the investment strategy of the Fund, it may make higher capital gain distributions than other ETFs. Please read the Fund’s prospectus for specific details regarding the Fund’s risk profile.

Holdings are subject to change. Please visit WisdomTree.com/investments for latest holdings.

WisdomTree Funds are distributed by Foreside Fund Services, LLC, in the U.S.

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