Animal Spirits Podcast

Talk Your Book: Investing for Income

Feb 26, 2024
Guest
Josh Greco
Join Josh Greco, Senior VP and Senior Institutional Portfolio Manager at Franklin Income Investors, as he dives into the world of multi-asset income funds. He discusses crucial asset allocation decisions and the effects of rate changes on portfolio yields. The conversation also touches on why investors often overallocate to cash and demystifies the workings of convertible bonds. Tune in for valuable insights on how to navigate today's challenging investment landscape!
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INSIGHT

Dynamic Allocation in Low-Rate Environments

  • During the 2010s low-interest-rate environment, many S&P 500 companies outyielded 10-year treasuries.
  • This made dynamic asset allocation crucial, favoring high-dividend equities over bonds at times.
ANECDOTE

Equity vs. Bond Yields

  • In 2021, some equities offered higher yields and returns than bonds from the same companies.
  • This dynamic reversed in 2022, enabling a rotation from equities to bonds.
INSIGHT

Income's Appeal

  • Income investing became more attractive as money market funds and CDs offered higher yields.
  • This shift changed investor behavior, prioritizing monthly cash flow and making income a key focus.
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