Investors confident in their fixed income holdings: Poll

Guggenheim survey finds while content, investors searching for more yield.
OCT 25, 2013
Despite head winds picking up speed, investors remain optimistic on the future of their fixed-income investments, but they are searching for new opportunities to find yield. The majority — 72% — of 1,000 investors with at least $100,000 in investible assets polled by Guggenheim Investments are counting on returns from fixed-income investments to continue providing steady returns. But the low-yield environment continues to be difficult, and investors can expect it to persist, said William Belden, Guggenheim's managing director of product development. In turn, investors are turning to traditionally less common investments in the hunt for greater returns. “I think investors are encouraged by the breadth of choices becoming available to them in fixed income,” he said, “and while you've seen some recent redemption activity overall on the heels on rising interest rates, there are pockets of fixed income, like defined maturity, bank loans and shorter-duration products that continue to experience positive inflows and carry the characteristics that investors look for from fixed income — steady income and stability of principal.” Specifically, Mr. Belden cited the high-yield space and emerging markets as two areas that have become more readily available to individual investors as they search for yield. Only 21% of people surveyed in Guggenheim's report said they have put money in fixed-income exchange-traded funds. While that number is fairly low, Mr. Belden said he believes that it has risen steadily and will continue to do so. The survey cited tax efficiency and convenience as two factors contributing to the growth in fixed-income ETF investments. In addition, while fixed-income investments been more stable than stocks, Mr. Belden said investors would be remiss to ignore equity investments altogether. “We're pretty bullish on the equity marketplace, while recognizing the volatility we're in right now,” he said. “Our flows have been very positive on the equity side as they have on fixed-income side.”

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