When investing for current income, it’s key to weigh the changing composition of the risk/reward profile of different types of income-producing securities (corporate, government and municipal bonds, preferred stock, real estate investment trusts, etc.). These articles assess income investing strategies and some of the primary risks involved.
Crit Thomas, CFA, CAIA, Erik M. Aarts, CIMA, Brian Cheyne, CFA, CIMA
“The yield curve, as measured by the 10-year and 2-year Treasury yields, inverted at the start of July 2022. At 13 months this is the longest inversion since 1981,” notes Touchstone’s Asset Allocation Committee. “Many wonder why we are not seeing more economic weakness by now, especially in labor market conditions. One consideration relates to the lagged effects of monetary policy. Historically, on average, there has been a 13-month lag between the last Fed rate hike and the start of a recession.”
Chris Mathewson of Ares Capital Management, LLC, sub-advisor to the Touchstone Credit Opportunities Fund, examines considerations surrounding the below investment grade universe and discusses how they inform the portfolio’s positioning.
Fort Washington Investment Advisors, Sub-Advisor to the Touchstone Ultra Short Duration Fixed Income Fund
In structuring the Touchstone Ultra Short Duration Fixed Income Fund, macroeconomic perspective helps determine duration, yield curve positioning and credit quality bias. And in seeking returns above the fund’s benchmarks, its sub-advisor relies on both strategic sector focus and bottom-up security selection.
Art DeGaetano of Bramshill Investments, LLC, sub-advisor to the Touchstone Flexible Income Fund, discusses where the portfolio has been seeking relative value and how it is being positioned looking forward.
Art DeGaetano of Bramshill Investments, LLC, sub-advisor to the Touchstone Flexible Income Fund, discusses factors currently influencing interest rate movements and shares his perspective on the risks that may accompany higher rates.
The approach utilized for the Touchstone Balanced Fund seeks to overcome shortcomings associated with traditional balanced stock/bond portfolios while adding value through active management. Fort Washington Investment Advisors, Inc. the Fund’s sub-advisor discusses two proprietary tools designed to address this.