The February 2020 Investment Planning Knowledge Circle will be held on Wednesday, February 26th at 3 pm ET.
Guest speaker Brian Dress with Left Brain Wealth Management, LLC will be presenting, "
Capturing Income in a Low Interest Rate World: A Place for High Yield Bonds in Client Portfolios."
For over a decade, interest rates have remained persistently low, presenting an almighty challenge for your clients that need income investments. Yields have collapsed: with the ten-year treasury trading just 1.61% and “high quality,” highly leveraged investment grade issuers like GE trading at an extremely narrow 150 basis points over treasuries, finding income in the current environment feels like a true uphill battle. In this session, we will discuss the importance of individual bond selection as a means to deliver results to wealth management clients for which income is a primary objective. High yield bonds can serve this purpose in client accounts and also give advisors a means to outperform the growing number of peers who provide only a passive investment strategy to their clients.
Key Topics that will be covered include:
- Why High Yield bonds: a study of historical outperformance versus dividend paying stocks and investment-grade bonds
- Why indexing approach doesn’t capture the real value of high yield bonds. Structural mispricing observed in bond market that our strategy seeks to exploit
- Criteria for selecting high yield bonds that are designed to maximize reward per unit of risk
- Discussion of risks related to high yield bonds: our view that risks to the asset class are overstated
- Examples of household names in the high yield bond space that we’ve identified in the past that illustrate the power of the asset class as a component of client portfolios
- 1 or 2 examples of underpriced securities we’ve identified in today’s marketplace
Brian Dress has 15 years’ experience in the investments industry. He is an investment analyst with Left Brain, responsible for coverage in the firm’s high yield bond and equity security platforms. Before joining Left Brain, he spent nearly a decade managing an independent portfolio of derivatives, focused mainly in the oil/gas and commodities markets, but also in equities and fixed income. Brian earned his B.S. in International Economics, from Georgetown University in Washington, DC. He is currently a candidate for the Chartered Financial Analyst (CFA) designation.