Fixed-Income Strategies to Navigate Today’s Challenging Markets


Strategies to Navigate Today’s Challenging Markets

In this podcast, our CEO Mark Goodwin and Red Cedar Investment Management’s Chief Investment Officer John Cassady and Director of Portfolio Management David Withrow discuss the strategies Red Cedar believes can enable income-oriented investors to navigate today’s challenging markets. We invite you to listen to John and David share their investment insights with Mark.

Click here to read the transcript

This podcast was recorded August 6, 2021. The opinions expressed are those of the North Square Investments, LLC Investment Team. The opinions referenced are as of the date of publication and are subject to change without notice. This material is for informational use only and should not be considered investment advice.

Definition for term used in this podcast:

The Bloomberg Barclays US Aggregate Bond Index – A broad base, market capitalization-weighted bond market index representing intermediate term investment grade bonds traded in the United States. The index is often used by investors as a stand-in for measuring the performance of the US bond market.

Correlation: a statistic that measures the degree to which two securities move in relation to each other.

Bond Ratings and Preferred Securities: Investment grade securities are those rated Baa3 or higher by Moody’s Investors Service, Inc., or BBB- or higher by Standard & Poor’s or Fitch Ratings Ltd. Ratings are expressed as letters ranging from ‘AAA’, which is the highest grade, to ‘D’, which is the lowest grade. Below investment grade securities are also known as “high yield” or “junk” securities.

Preferred securities are “hybrid” investments, sharing characteristics of both stocks and bonds. Similar to stocks, they’re generally paid after a company’s bonds. Like bonds, they usually make regular fixed payments and have a par value that is returned to the investor if or when the securities mature or are redeemed by the issuer, barring default. The price of a preferred security may still fluctuate in the secondary market. Preferred securities have very long maturities (for example, 30 years or more) or have no maturity date at all, meaning they are perpetual securities.

VIX Futures: Introduced in 2004 on the Cboe Futures Exchange℠ (CFE®), VIX futures provide market participants with the ability to trade a liquid volatility product based on the VIX Index methodology. The CBOE Volatility Index is a real-time index that represents the market’s expectations for the relative strength of near-term price changes of the S&P 500 index (SPX). Because it is derived from the prices of SPX index options with near-term expiration dates, The VIX generates a 30-day forward projection of volatility. Volatility, or how fast prices change, is often seen as a way to gauge market sentiment, and more specifically the level of fear among market participants. VIX futures reflect the market’s estimate of the value of the VIX Index on various expiration dates in the future.

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Martin Gawne