On October 27, 2023, VettaFi hosted an Income Strategy Symposium that saw nearly 900 advisors and investors register for the event. The symposium was a success for everyone involved, and included some of the top firms and individuals in the industry offering their insights into several different income-related topics.
Below, readers will find a brief summary of each of the sessions and additional key points the speakers shared. To view the playback of the Income Strategy Symposium, please register for the on-demand replay here.
Where Are Advisors Allocating Assets?
In the first panel of the symposium, moderator Tom Lydon, vice chairman at VettaFi, spoke with Brian Donnelly, a fixed income strategist, and vice president at Fidelity Investments, and John Croke, head of Active Fixed Income Product Management at Vanguard. The trio covered several different topics throughout their conversation pertaining to areas of the market where advisors are allocating assets. Donnelly feels like the industry is currently too comfortable in cash. He also highlighted that he believes bonds are going to do better, because he has never seen bonds stay in a continuous decline. Croke believes the Fed is at or near the end of the hiking cycle. However, he and his firm are calling for a mild recession in the middle part of next year. Croke also shared that he thinks investors should be including duration funds in their portfolios.
Are Investors Compensated for Credit Risk?
During the second panel of the symposium, Todd Rosenbluth, head of Research at VettaFi, was joined by Ashley Wiersma, a portfolio specialist with T. Rowe Price, and Kevin Nicholson, global fixed income CIO/co-head of the Investment Committee at RiverFront Investment Group. This group discussed how advisors’ sentiment toward corporate bonds is picking up. Wiersma and Nicholson also gave their thoughts on how high yield sentiment is improving among investors, and what that means moving forward. Wiersma highlighted energy and healthcare as sectors she and her firm are keeping their eyes on. While Nicholson shared a similar sentiment with Wiersma toward the energy sector, he named the financial sector as one he and RiverFront are keeping their focus on.
Calling on Equity Income Strategies to Provide an Alternative
Sirion Skulpone, managing director and global head of client portfolio management for equity solutions at Goldman Sachs, was joined by Lydon to discuss alternative income strategies. She shared her insights on covered call options and buy-right strategies. Skulpone also highlighted the firm’s recent ETF launches, the Goldman Sachs S&P 500 Core Premium Income ETF (GPIX ), and the Goldman Sachs Nasdaq-100 Core Premium Income ETF (GPIQ ).
The Growing Popularity of Active Funds
Anmol Sinha, fixed income investment director at Capital Group, and Dan Larkin, a senior fixed income specialist at Vanguard, joined the symposium to discuss active management strategies within the fixed income space. The pair of financial professionals discussed how active ETFs have begun to take some market share away from passive funds, when looking at data provided by VettaFi. Sinha and Larkin then introduced funds from their individual firms that can give investors active exposure to the fixed ncome market.
What to Look for Outside of Bonds for Downside Protection & Income
Christian Magoon, founder and CEO at Amplify ETFs, and Garrett Paolella, co-founder and managing partner at NEOS, joined the conversation to share their thoughts on looking outside of bonds for tax-efficient income. Both speakers shared that the fixed income volatility the market is currently seeing is top of mind for a lot of investors. Magoon also shared that he currently believes we may begin to see a surge in what he calls “T-bill and chill.” Paolella highlighted how NEOS values the utilization of options-based strategies.
The Risks & Opportunities of Municipal Bonds
Courtney Wolf, fixed income portfolio manager at Capital Group, and Marc Zeitoun, chief operating officer – North America Distribution, and head of strategic beta at Columbia Threadneedle, discussed several different opportunities within municipal bonds. During this session, data collected from VettaFi showed that municipal bond sentiment among investors has remained stable recently. Specifically, sentiment is strong for high-quality municipal bonds. Outside of discussing that, Wolf named the housing sector and mortgage-backed securities as places she and her firm are looking for when it comes to municipal bonds. Zeitoun shared that given the current market environment, it would be a shock to him if people didn’t see an opportunity in municipal bonds.
Generate Income & Reduce Equity Risk at the Same Time
Jonathan Shelon, chief operating officer at KraneShares, and Alex Zweber, managing director of investment strategy at Parametric, discussed a multitude of topics to close the symposium. Shelon shared how ETFs can take strategies from other areas of the financial world and make it easier for investors to invest in them. He also shared that KraneShares gets more than half of its new strategies from conversations with its investors. Zweber shared the importance of looking at alternative income strategies and some of the benefits of doing so.
Overall, the Income Strategy Symposium offered investors and advisors insight into how some of the top firms and individuals are implementing several different income strategies. To view the playback of the Income Strategy Symposium, please register for the on-demand replay here.
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